confusion about lending money

Eric E Moore e.e.moore@sheffield.ac.uk
Mon, 04 Nov 2002 19:08:59 +0000


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chris <reddaemon@shaw.ca> writes:

> hi. i have started using gnucash recently and i really like it. however
> i have some transactions i would like to enter but i am not sure how to
> do so.
>
> i hold the lease on my apt and my roommate bob (names and figures are
> made up) pays me half the rent. rent is 600. rod was short this month so
> i spotted him 20. i would like to keep track of how much he owes me
> because the amount he really owes is alot to me.
>
> so i was wondering
>
> how do i enter in the initial transaction?

I'd set it up like follows.

  Set up the following accounts:
  Cash (asset)
  Rent (expense)
  A/R Rod (asset)

  Each month, when you pay the rent:

  credit cash $300 debit rent $300
  credit cash $300 debit A/R Rod $300

  When rod pays you:

  credit A/R Rod $280 debit Cash $280

  And only track your share of the rent as an expense.

Alternatively, if you want to track the full amounts,=20

  add a "money from rob" income account.

  Each month:
  credit cash $600, debit rent $600
  credit "money from rob" $300, debit A/R Rob $300

  and when rob pays you $280 transfer the money from A/R Rod to Cash.

> how do i settle the accts if he pays me?

  transfer the remaining $20 from A/R Rod to Cash.

> how do i settle the accts if i force him to pay a bigger share of the
> cable/internet bill to even things out?

  However much cash you put up, put towards the cable expense account,
  and take the extra of your share from A/R rob.

> how do i settle the accts if he doesnt pay me and i cant make him pay a
> bigger share of the cable/internet bill?

  Create an expense account called "Rob sucks" and write-off the debt
  by transfering the money for A/R Rob to "Rob sucks"
=20=20
> if i am not mistaken the money rod owes me is an acct receivable and is
> an asset. i am pretty sure that a/r rod is supposed to have a positive
> balance and that cash gets credited.

Almost right.

> 		db	cr
> rent		600
> cash			300
> money from rod		280
> cash			20	money lent to rod
> a/r rod		20		a/r rod has positive balance now
> ???			20
> this looks mostly right but its imbalanced. there is something i need to
> do but what?

               db       cr
Rent           600
Cash                    600    money you're responsible for paying
A/R Rod        300
Rod Income              300    money you've earned from rod
Cash           280
A/R Rod                 280    money you actually got from rod

At this point. A/R Rod has a balance of $20.

>
> payment
> 		db	cr
> money from rod		20
> cash		20		cash is increased
> a/r rod			20	should be made zero
> ???		20		imbalance. whats wrong?
>
> if i consider ??? an account everything balances :)

One too many transactions.  consider actually getting paid as
converting an asset (the promise to pay you $20) to another asset ($20
in green stuff that folds)

> force him to pay a bigger share of the cable/internet bill
>
> 		db	cr
> cable/internet	25		this is what i wish i was paying :)
> cash			5
> a/r rod			20

> i think i have this right

right.

> write it off
> 		db	cr
> money lost	20		*sniff* goodbye :(
> a/r rod			20
>
> i think i have this right too.

right.

> help me please :)

did this help?

--=20
Eric E. Moore

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