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Is a loan's principal payment included on the income statement?

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Is a loan's principal payment included on the income statement?
posted Jun 30, 2017 by Ritika Sharma

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1 Answer

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A loan's principal payment will not be included on the income statement. The principal payment is a reduction of a liability, such as Notes Payable or Loans Payable, which is reported on the balance sheet. The principal payment will also be reported as a cash outflow on the Statement of Cash Flows.

Only the interest portion of a loan payment is reported on the income statement, and it is reported as Interest Expense.

answer Jul 1, 2017 by Prajwal C.m.
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