Your company borrowed 100,000 from the bank a few years ago to purchase several pieces of equipment. You just made the last payment on the loan, and all of the equipment is still being used. This will be recorded on the cash flow statement in: Both the financing and Investing sections. The financing activities section. Both the financing and operation sections.

Question

Your company borrowed 100,000 from the bank a few years ago to purchase several pieces of equipment. You just made the last payment on the loan, and all of the equipment is still being used. This will be recorded on the cash flow statement in: Both the financing and Investing sections. The financing activities section. Both the financing and operation sections.

Answer 1

The financing activities section.When you make the last payment on a loan, it is recorded in the financing activities section of the cash flow statement. This section reflects cash flows related to borrowing and repaying debt, issuing and repurchasing stock, and paying dividends. The repayment of the loan principal is considered a financing activity.

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