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A company with outstanding bonds of $100,000 retires the debt early by buying back the bonds at $ 83,000. The impact on the cash flow statement, assuming the indirect method is used, would be:
Correct Answer: B
Since a gain of $17,000 would be recognized on the income statement, it must be subtracted from cash flows from operations to zero out the effect. The entire cash outflow of $83,000 would be reported as a cash outflow from financing.