USA Vehicle Loan In Cash Flow Statement

[Pauljeon]

Dear all,

How would you present inception of new vehicle loan? Would you just present it in the supplemental disclosure of noncash investing/financing activities? Also, whatever repayment of principal would be presented in the financing activities?

 

[Steve-LevelUp]

A new vehicle loan would be reflected as a liability on the balance sheet, with the vehicle as an asset.

As the loan is paid off, the liability would be reduced by the applicable amount, with a portion going to interest expense, depending on the interest rate.

 

[kirby]

How would you present inception of new vehicle loan? Would you just present it in the supplemental disclosure of noncash investing/financing activities?

yes. At inception you have DR Vehicle and CR Vehicle Loan Payable. So no cash movement in statement of cash flows,

Also, whatever repayment of principal would be presented in the financing activities?

yes.