Respuesta :
If a company borrows money from a bank, the interest paid on this loan should be reported on the statement of cash flows as financing activities.
What are financing activities?
- Financing activities include debt, equity, and dividend transactions.
- Debt and equity financing are reflected in the cash flow from the financing section, which varies depending on the company's capital structure, dividend policies, and debt terms.
- The cash flow statement's financing activity focuses on how a company raises capital and returns it to investors via capital markets.
- Dividends paid, repurchase of common stock, and proceeds from debt issuance are the three largest line items in the cash flow from financing activities statement.
- For example, if a company borrows money from a bank, the interest expense on the loan should be reported as financing activities on the statement of cash flows.
Therefore, if a company borrows money from a bank, the interest paid on this loan should be reported on the statement of cash flows as financing activities.
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