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Good morning
this question states that 3m of the principal will be paid at the end of each year from the cash flows generated by the business activity.
my question: the answer does not show any deduction of 3m, either in the p/l statement or the equity. where/how wd this payment of principal will be shown?
I do not have the Kaplan kit – only the BPP Revision Kit.
However I assume that it is the question from the December 2011 real exam.
Repaying loans never appears in the profit statement and never affects the equity!!!!
The double entry when a loan is repaid is credit cash and debit loan (this is basic financial accounts from Paper F3)
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