6. Bonds payable issue and recording interest expenses.(15%)
The ABC Company sold $600000 of its 9.5%， 12 years bonds on April 1， 2000， at 106. The semi-annual interest payment dates are April 1 and October 1. The effective interest rate is approximately 8.9%. The company‘s fiscal year ends December 31.
Required：
Prepare journal entries to record：
(1) The issue of the bonds on April 1，2000
(2) The first interest payment on October 1， 2000
(3) The Amortization of premium or discount and interest expenses on December 31， 2001.
7. Statement of Cash Flows (14%)
The net income of the ZY Company for 1999 was $260000. Additional data available relative to activities for the year are given below：
A. Depreciation expenses for the year， $90000；
B. Loss on sale of machinery used in operations was $2400；
C. Accounts receivable increased by $2000；
D. Accounts payable increased by $8400；
E. Patent amortization for the year was $14800；
F. Amortization of premium on bonds payable for the year was $4600.
Required
Prepare the cash flows from operating activities section of a statement of cash flows under the indirect method.
