Opening the books with a Loan
rshgeneral at yahoo.com
Wed Nov 11 03:13:58 EST 2009
Suppose a business starts with zero assets. Suppose they only have a loan for X dollars to start. This is obviously a liability. How would they open their books in GnuCash?
I've considered the following: In Opening Balances, decrease equity by X and credit (increase) a liability account for X. This would mean that Assets would be zero, Liabilities would be X and Equity would be -X.
Okay, looks good so far to me. Perhaps I'm missing something obvious in accounting in the next part. I run a balance sheet report and it tells me that Total Liabilites & Equity = 0. Shouldn't it be X or at least -X?
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