Mortgages?

[Jason Rennie]

dank@alumni.caltech.edu said:
> Or should it be -1 times the principal owed?  
> Or should there be two accounts - 'mortgage interest' and 'mortgage
> principal'? And must I manually split each payment? 

That would be the proper way to do it---to have a liability account for
the principal and an expense account for the interest.  Each payment
subtracts from your checking, adds the principal part to your mortgage
liability account (hence reducing your liability) and adds the interest
part to your expense account.

Note that this works nicely with the "zero-sum" accounting philosophy. The
large negative that initializes the liability account (the principal that
you initially owe) is offset by an asset entry (the value of your house
minus down payment).  i.e. after buying a house and making one payment,
you should have a set up like this (assuming a purchase price of 200,000 
and an interest rate of about 7%): 

Assets
  Checking Account
    -20,000: Down Payment
    -1,200: 1st Mortgage Payment
  House
    +20,000: Down Payment
    +180,000: Mortgage
Liabilities
  Mortgage
    -180,000: Mortgage
    +150: 1st Mortgage Payment
Expenses
  Mortgage Interest
    +1,050: 1st Mortgage Payment

Jason