Use the amortization schedule for a debt issued at a discount to fill in the blanks on the statement of cash flows. The company uses the effective- interest method to amortize the bond discount. The debt is paid back at the end of year 3. Since the set up clearly specifies cash inflows and outflows, there is no need to put parentheses around your numbers.

Amortization schedule:

	Cash Paid	Interest Expense	Discount Amortized	Carrying Value
Date of issuance				9,520
End of year 1	1,000	1,142	142	9,662
End of year 2	1,000	1,159	159	9,821
End of year 3	1,000	1,179	179	10,000

Statement of Cash Flows, Direct Method of Presenting CFO.

	Year 1	Year 2	Year 3
CF Operating
Cash paid
CF Financing
Cash received
Cash paid