Chester Company Began Year 2 with a Note Payable of $20,000

Multiple Choice

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) $1,200 outflow
B) $20,000 outflow
C) $20,400 outflow
D) $21,200 outflow