Chester Company began Year 2 with a note payable of $20,000 and an interest payable of $800. During the year, the company accrued an additional $400 of interest expense, and paid off the note with interest. What is the amount of cash flows for financing activities that will be reported on the statement of cash flows as a result of these transactions?
A. $21,200 outflow
B. $20,400 outflow
C. $1,200 outflow
D. $20,000 outflow
Answer: D
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