Loan Question
Charles M. Gajan
charlesgajan@earthlink.net
04 Dec 2002 22:39:01 -0500
I was looking back in the archives to investigate a problem I am having
with a loan. I found the messages reflected my understanding of the
procedure for booking the loan and depreciation. However, I am a
confused. When booking the liability I entered the entire amount. Loan
= principle + interest (this is where my confusion starts). When making
my monthly payment I credit checking, debit liability for the principle,
and debit interest expense for the interest. Should I have only the
principle reflected in the liability account? If not, how will it ever
reduce to zero. Any help in clarifying will be appreciated.
Chas.