Loan
Yawar Amin
yawar.amin at gmail.com
Sun Nov 7 22:26:10 EST 2010
Hi Dennis,
On 2010-11-07, at 22:07, Dennis Powless wrote:
> I've read the guide about loans...
>
> I have a mortgage. I pay the P, I and escrow each month.]
>
> When I set up the mortgage I have a mortgage company account
> (liability:MortgageXYZ), escrow (assets:MortgageXYZ Escrow) and
> interest accounts (Expenses:Mortgage interest). I determined I need
> an asset account, (Assets:MortgageXYZ Property).
>
> What do I do with the actual asset account? I see in the guide I give
> it the total amount I paid for the house.... and how does thi play in
> the monthly payment... Ie. I pay 100 to interest, 10 to the mortgage
> principle and 4 to the escrow... for a total payment of 114.00 from
> the checking account. How does the actual asset get affected?
>
>
> Or, is this not make sense?
I think I understand, but let me try to translate it into GnuCash terms to make sure:
(1) Initial mortgage setup
Assets:MortgageXYZProperty Dr $100,000
Liability:MortgageXYZ Cr $100,000
(2) Monthly payment
Expenses:MortgageInterest Dr $ 100
Assets:MortgageXYZEscrow Dr $ 4
Liability:MortgageXYZ Dr $ 10
Assets:Checking Cr $ 114
So all you would need to do in GnuCash is enter (1) initially, then set up a monthly scheduled transaction to take care of (2) for you. Your Assets:MortgageXYZProperty account would remain untouched after the initial setup (1), except for home reno/depreciation and other pertinent events, as Alex Hill noted.
Hope this helps,
Yawar
N.B. Just a little disclaimer that I am not an accountant and none of my emails should be taken as financial advice. Thanks.
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