The company has bonds outstanding with a face value of

The company has bonds outstanding with a face value of $50,000 and an unamortized premium of $2,350 at the beginning of the year and $2,000 as of the end of the year. Sales (all for cash) were $42,000 for the year. Total interest expense of $4,650 was reported for the year. Because interest expense is the only expense for this company, net income for the year was $37,350 ($42,000 - $4,650). Prepare the Operating Activities section of the cash flow statement using both
(1) The direct method and
(2) The indirect method.

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...