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On January 1,2011,Ace Electronics Borrowed $40,000 on a Five-Year,7% Note only the interest\bold{\text{only the interest}}

Question 52

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On January 1,2011,Ace Electronics borrowed $40,000 on a five-year,7% note.Ace will pay only the interest\bold{\text{only the interest}} on the loan on December 31 each year.The entire principal will be repaid on December 31,2015,the last interest payment date.On its statement of cash flows for the year ended December 31,2011,Ace will show cash paid for interest as ________ activity.


A) $(9,756) ,an operating
B) $(2,800) ,a financing
C) $(9,756) ,a financing
D) $(2,800) ,an operating

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