Debt Issuance Through Statements
I was looking through the interview guide but this topic was not covered.
How does a debt issuance reflect among the financial statements?
Thanks!
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No change to I/S at first, until interest expense hits the I/S and when that happens just run through the statements as a change in pretax income to I/S. On the CF statement no change to CFO or CFI but cash will increase as a result of the debt issuance reflecting under Cash from financing. Ending cash increases resulting in an increase in the cash balance under assets on the B/S and LT Debt will increase under liabilities balancing out the B/S.
Gracias Amigo
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