Let me rephrase the question...

[John Edwards]

On Wed, Aug 12, 2009 at 12:51 PM, Joe Hildreth <joeh at threerivershospital.com
> wrote:

> I have an existing home mortgage that the principal balance is $82,000.
> The house is valued at $100,000 dollars.
>
> I want create the accounts for this loan.  I know I need the following
>
> Assets: Checking (where I will show my payments)
> Assets: Purchased Assets (where I will keep the value of the house)
>
> Expense: Interest Paid (Where I will track the interest paid on the
> mortgage loan)
>
> Liability: Home Mortgage (Which tracks the principal amount of the loan)
>
> Maybe I was making more complicated than I needed to.  Would I do the
> following to set it up?
>
> Create the Assets:Purchased assets with an opening balance of $100,000 from
> Equity: Opening Balances (The same account that I used to set up my checking
> balances)
>
> Create the Liability: Home Mortgage account with a opening balance of
> $82,000 from Equity: Opening Balances
>

Yes. Your Home Equity is different between the balances in your asset and
your mortgage accounts.


> Then when I want to make a payment do a split like this:
>
> Assets: Checking debit the payment
> Expense: Interest Paid credit the interest portion
> Liability: Home Mortgage credit the principal payment
>

You've got the debits and credits backwards (at least in accounting terms),
but that's basically it.

In your chequing account, you would enter a 100 payment (for example), and
split it between the Interest Expense account and your Mortgage Liability.



John

-- 
John Edwards
"You can insure against the weather, but you can't insure against
incompetence, can you?" - Phil Tufnell