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Forgiveness of PPP loan proceeds should be recorded as income from continuing operations, as a separate line item. of loan forgiveness from the U.S. government is received.

Any amount forgiven is recorded as gain from extinguishment/forgiveness of debt once legally released from being the primary obligor. Gain from forgiveness is presented on its own line in the income statement as other income or operating income (since location is not specified by US GAAP).

"The creditor is required to file a 1099-C form with the IRS, which will detail the amount of your settled debt," says Tayne. Similar to income tax forms, you will also receive a copy of the 1099-C forgiveness of debt form from the forgiving creditor in the tax year the final payment is made.

The increase to income is usually shown as a line-item such as ?debt forgiveness? at the bottom of the profit and loss statement, below operating income. For example, if $5,000 in debt is forgiven, the entry would be to debt (decrease) debts payable for $5,000 and credit (increase) debt-forgiveness income for $5,000.

Secured loans tend to have less stringent requirements and more favorable terms because the lender can take your collateral if you miss your loan payments. Some of the easiest loans to get in this category include auto title loans and pawnshop loans, but these also tend to be relatively expensive loans.

Loan documents are documents provided and requested by lenders for the purpose of providing a loan. They are typically statements of personal and financial information of the borrower to approve a loan. These documents are used by the lenders to evaluate whether or not they will provide you with a loan.