How to enter an existing loan

[Robin Chattopadhyay]

That's essentially how I do it.

In this case, the Home Equity account value does not change during the life
of the loan unless I write up or write down the value of the home. As I make
payments to the mortgage, the liability goes down and the *total* equity
goes up because the Interest Expense is wrapped up in Retained Earnings (and
the Asset and Home Equity values haven't changed).

HTH
Robin
On Wed, Aug 12, 2009 at 9:44 AM, Joe Hildreth
<joeh at threerivershospital.com>wrote:

> My wife and I are wanting to use GNUCash to track our personal finances.
>  The checking, savings and money market accounts were simple enough.  Our
> question is our home mortgage.
>
> I am thinking that I need the following
>
> Asset:
>   Purchased Assets
>
> Liability:
>   Home Mortgage
>
> Equity:
>   Home Equity
>
> Expense:
>   Interest Paid
>
> then set up the transaction for the loan as follows as follows:
>
> Purchased Assets: = Value of house
> Home Mortgage = Current Principal on loan
> Home Equity = Principal paid on loan at this time
>
> When I make a payment the transaction like this:
>
> Home mortgage = principal payment on loan
> Interest paid = interest payment on loan.
>
> I am not a finance guy by any stretch of the imagination so I am open to
> explanation or criticism.  Does this look like an acceptable way to set an
> existing home mortgage up?  Thank you for your time.  :-)
>
> Warm Regards,
>
> Joe Hildreth
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