Tracking 'retained losses' and mortgage payments
Sat, 28 Oct 2000 17:11:10 +0100
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On Sat, Oct 28, 2000 at 10:56:27AM -0400, Wesley wrote:
> First, for balances in my checking and savings account, I set up a
> "Retained Earnings" account of type Equity. Next, for my unsecured loan
> balances (credit cards, line of credit, etc.), I set up a "Retained
> Losses" account, also an Equity account. Seems to work, but is this
> generally the "right" or best way to handle those sorts of things at
> initial setup?
I have an "Overall banking assets" account (of type "Asset"). Current
(checking) and savings accounts are subaccounts of that account (of
Similarly, I have a "Short-term liabilities" account (of type
"Liability"), of which each credit card is a separate subaccount (of
type "Credit Card").
The only use I have made of Equity accounts has been setting up
opening balances (I have an "Opening Balances" account of type
I'm not entirely clear on whether you mean that you've used your
"Retained Earnings" Equity account for setting up the initial balances
(in which case it sounds like you've done about the same as me) or
whether your bank accounts, credit cards etc are also of type Equity.
> My next question has to do with tracking my home mortgage payments.
> Here's what I've done: I entered an Asset worth the purchase price of
> the house when I bought it, and a Liability that's the remaining
> principal owed on the mortgage. I think the difference went to equity,
> which would make sense.
Yes, that sounds reasonable.
> The problem is that I don't get a monthly
> statement saying how much of each month's payment is for principal and
> how much for interest. I just get a yearly summary. Also, each monthly
> payment is divided among "principal and interest" (lumped together),
> escrow, escrow adjustment, deficiency amount, and "other". How far do
> all you veteran users go towards breaking out all this sort of thing?
> Do you just estimate the break-down month by month and then make
> corrections once a year when you have the statement? Do you ask the
> lender for an actual amortization chart and use it for reference month
> by month? Or am I making this way more complicated then need be??
I don't have a mortgage, but I do have a student loan for which a
similar problem arises. (The only components of that are principal
and interest, so it's slightly simpler -- I don't know what the other
categories you mention above refer to.)
Until September (when the first annual statement since my adoption of
Gnucash arrived), I had been reducing the student loan liability each
month by the amount of cash that had gone into it. When the statement
arrived, I went through and made the necessary adjustments.
When everything was up to date, I put together a spreadsheet (in
Gnumeric) to work out how much interest would accrue each month for
the coming year. Now, each month, I enter the cash payment (debit
"Student loan", credit "Bank account") and the interest element (debit
"Interest expense", credit "Student loan").
I expect I'll have to make a few adjustments when the next statement
comes through next September, but they should only be a few pence: in
the meantime I've got a reasonable idea of how things stand.
Terry Boon, Hertfordshire, UK
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