The principal of a loan does not include any interest charges.

Name: The principal of a loan does not include any interest charges.
Brand: Quizplus
Rating: 4.9 (26 reviews)

Question

Quizplus · Accepted Answer

The principal amount of a loan is the amount of the note payable;the amount owed as of the day the note is established.A liability is first recorded at the amount initially owed,which excludes interest charges.Interest arises only when time passes,so no interest is recorded on the day the company purchases an item on account or the day the company receives a loan.

The Principal of a Loan Does Not Include Any Interest