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

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.