Each year, Pacific Enterprises (PE) prepares a reconciliation schedule that compares its income statement with its statement of cash flows . In its 2018 income statement, PE reported $11,000 of interest expense on its outstanding bonds. During the year, PE paid its regular installments of $9,000 of interest in cash. In its reconciliation schedule, PE should: Show a $2,000 positive adjustment to net income under the indirect method for the decrease in bond discount Show a $2,000 positive adjustment to net income under the indirect method for the decrease in bond premium Show a $2,000 negative adjustment to net income under the indirect method for the decrease in bond discount Show a $2,000 negative adjustment to net income under the indirect method for the decrease in bond premium
Each year, Pacific Enterprises (PE) prepares a reconciliation schedule that compares its income statement with its statement of cash flows . In its 2018 income statement, PE reported $11,000 of interest expense on its outstanding bonds. During the year, PE paid its regular installments of $9,000 of interest in cash. In its reconciliation schedule, PE should: Show a $2,000 positive adjustment to net income under the indirect method for the decrease in bond discount Show a $2,000 positive adjustment to net income under the indirect method for the decrease in bond premium Show a $2,000 negative adjustment to net income under the indirect method for the decrease in bond discount Show a $2,000 negative adjustment to net income under the indirect method for the decrease in bond premium
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...
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