Francois water corporation issued common stock of $28,000 to pay off long term n

Question

Francois water corporation issued common stock of $28,000 to pay off long term note payable of $28,000. In what section(s) would these transactions be recorded on the statement of cash flows? A- financing activities section for payment of note payable of $28,000 B- financing activities section for cash receipt of $28,000 C- non-cash investing and financing activities of $28,000 D- operating activities section for cash receipt of $28,000 E- none of the answers is correct Francois water corporation issued common stock of $28,000 to pay off long term note payable of $28,000. In what section(s) would these transactions be recorded on the statement of cash flows? A- financing activities section for payment of note payable of $28,000 B- financing activities section for cash receipt of $28,000 C- non-cash investing and financing activities of $28,000 D- operating activities section for cash receipt of $28,000 E- none of the answers is correct A- financing activities section for payment of note payable of $28,000 B- financing activities section for cash receipt of $28,000 C- non-cash investing and financing activities of $28,000 D- operating activities section for cash receipt of $28,000 E- none of the answers is correct

Explanation / Answer

The correct answer is Option - C ''non-cash investing and financing activities of $28000'' under financing activities.

This is because in whole transaction, cash is not involved. JOurnal entry would be:

Notes payable debited by $28000 and common stock credited by $28000

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