Kier Company issued $500,000 in bonds on January 1, 2016. The bonds were issued at face value and carried a 3-year term to maturity. They had a 5.50% stated rate of interest that was payable in cash on December 31st. Based on this information alone, the amount of interest expense shown on the 12/31/2016 income statement and the cash flow from operating activities shown on the 12/31/2016 statement of cash flows would be:

Interest Expense	Cash Outflow
A.	$27,500	$27,500
B.	zero	zero
C.	zero	$27,500
D.	$27,500	zero

Option A

Option B

Option C

Option D

Answer rating: 100% (QA)

Option A is correct 500000 x 550 27500 which is the interest ex... View the full answer