Response to the following problem:
Ventius Company issued $10,000 of four-year bonds on December 31, 2000. The coupon rate on the bonds is 7½%. The bonds were sold for $9,400.
a. Show four possible ways that the interest, principal, and discount can be distributed (allocated) between operating and financing cash flows for the years 2000-2004.
b. Discuss these four approaches and state your preferences.