if a company purchases $200,000 of land by issuing a long-term bond, this transaction is [...]
Answer
Non-cash Activities
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Subject 1. Classification of Cash Flows and Non-Cash Activities ough a capital lease. Obtaining long-term assets by issuing notes payable to the seller. Exchanging one non-cash asset for another non-cash asset. The purchase of non-cash assets by issuing equity or debt securities.
For example, <span>if a company purchases $200,000 of land by issuing a long-term bond, this transaction is a non-cash one, as it does not involve direct outlays of cash. Therefore, it is excluded from the statement of cash flows. These types of transactions should be disclosed in a separate schedule as part of the statement of cash flows or in the footn
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