At the beginning of the year, Nothing More Corporation had a long-term debt balance of $37,304. During the year, the company repaid a long-term loan in the amount of $9,964. The company paid $3,760 in interest during the year, and opened a new long-term loan for $8,800. What was the cash flow to creditors during the year?
The cash flow to creditors during the year can be calculated as follows:
- Starting long-term debt balance: $37,304
- Repayment of a long-term loan: (-)$9,964
- Interest paid: (-)$3,760
- New long-term loan obtained: $8,800
Adding or subtracting these amounts, we get the cash flow to creditors for the year:
Cash flow to creditors = Initial long-term debt - Repayment of loan + Interest paid + New loan Cash flow to creditors = $37,304 - $9,964 - $3,760 + $8,800 Cash flow to creditors = $25,140
So, the cash flow to creditors during the year was $25,140.
