Kurt has a 5-year bank loan with his business.The principal that is scheduled to be paid in the first 12 months is considered ______.

Question

Quizplus · Accepted Answer

The principal payments due in the first 12 months of the 5-year bank loan are considered short-term portion of long-term debt because they are a part of a long-term liability that will take 5 years to pay back, but are due within a year. They are not considered a loss or operational cash flows.

Kurt Has a 5-Year Bank Loan with His Business