401k loan question
Dale Alspach
alspach at math.okstate.edu
Sun Mar 25 22:09:10 EDT 2007
It seems to me that when you took out the loan you had a liability
outside of the 401k for $1500 and an asset of $1500 inside the 401k.
Each time you make a payment say $30 with $8 in interest and $22 in
principal. Outside of the 401k you have a debit of $22 on the loan and
an $8 expense for interest. Inside the 401k you have a credit of $22
against the loan and $8 in income.
Borrow 1500 and deposit into checking.
Initiation:
debit credit
401k:cash 1500 #These are both assets
401k:loan 1500
assets:checking 1500
liabilities:loan 1500
Pay $30 from paycheck
Payment:
401k:income 8
401k:loan 22
401k:cash 30
income:paycheck 30
liabilities:loan 22
expense:interest 8
Dale Alspach
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