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.