Pledge to a church -- how to account for it?

[David Harrison]

On 22 Dec 2004 23:25:01 -0700, Robert Uhl <ruhl at 4dv.net> wrote:
> Matej Cepl <cepl at surfbest.net> writes:
> >
> > I have an accounting problem. We have pledged a year with my wife to
> > pay to the church some fixed amount up front and then monthly $50 for
> > building campaign. However, I have not managed to create a way how to
> > account for it properly. I have created a special account
> > Liabilities/Building Campaign and put there all money we pledged
> > (minus the amount we paid immediately).  Then I decreased that amount
> > monthly by $50 against the checking account.  The problem is that I do
> > not get increased Expense:Charity:Building Campaign account so these
> > payments are not reflected in our expenses. I have to probably make
> > one more account somewhere, but I have not figured out where and which
> > one.
> 
> The expense was incurred when you made the pledge and created the
> liability: money moved from the $0 balance liability account into your
> Expenses:Charity:Building Campaign account.  When you pay off the
> liability, money moves from chequing (or whatever) and into the
> negative-balance liability account until it is at $0 again, in which
> case you have paid off your liability.
> 

I agree with you.  Here is an example to illustrate (just for clarity).

Entry to set up the pledge and amount paid immediately:

Expenses:Charity:Building Campaign       $ 600.00
        Liability:Charity:Building Campaign                   $500.00
        Assets:Bank                                                   $100.00

Entry for monthly payments:

Liability:Charity:Building Campaign           $50.00
        Assets:Bank                                                   $50.00

-- 
David Harrison, BAccS, CGA