Transfers not showing in Income Statement

[Eric Anopolsky]

On Wed, 2008-09-03 at 19:40 -0400, warlord at MIT.EDU wrote:
> Hi,
> 
> Quoting Nicholas Hasser <nick at underthebrim.com>:
> 
> > I'm running gnucash 2.2.6 on OS X.
> >
> > This is more of a general accounting question than a gnucash question, I
> > believe.
> >
> > I have my mortgage set up as a liability. I have a scheduled transaction
> > set up to transfer my monthly payment from assets:checking_account to
> > liabilities:mortgage.
> >
> > I understand that it they aren't income and expense accounts, but how do
> >  I reflect this actual payment being made in my Income Statement
> > report? Do I need to set up an expense for my mortgage payment? If so,
> > how do I tie that back into the liability which is the loan?
> 
> You don't.  Paying down the loan isn't an Expense.  The change
> will, however, appear on your Balance Sheet report.   Or you can
> see it in a Cash Flow report.

Your payment is actually a split transaction. Some of your money goes
toward paying down the principal (a liability account) and some goes
toward mortgage interest (an expense account). If your loan is PITI,
your split may include a third part to replenish the escrow account
associated with that loan (an asset).

Cheers,
Eric

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