Thanks for the reply, @Angelyn_T . I checked again on the loan payment - the Billable box is not ticked, and the Project name is listed on that line item under Customer/Project. 

On the Project page, the payment is listed under "Transactions," but not as a "Cost" of the project. Only payments that are categorized as Expenses are listed as Project Costs.

The $500.00 payment is split between $81.66 in category Mortgage Interest Expense and $418.34 in category Mortgage (a Long Term Liability). Both line items have the Project listed under the Customer/Project column. The $81.66 shows up as a Project Cost, but not the Mortgage (principal) amount.