Loan

[Dennis Powless]

Thanks for the clarification, as I was a bit confused on the guide.
It states a bit about the actual asset of the home.

So, I will use #2 set up to make monthly payments.  That's what I was
going to do, but the guide confused me a little.

Oh, are the loans supposed to have positive values? ie the mortgage
and or auto loan?

Are the credit cards supposed to be positive, when you owe them money?


Thanks!!





On Sun, Nov 7, 2010 at 10:26 PM, Yawar Amin <yawar.amin at gmail.com> wrote:
> Hi Dennis,
>
> On 2010-11-07, at 22:07, Dennis Powless wrote:
>
>> I've read the guide about loans...
>>
>> I have a mortgage.  I pay the P, I and escrow each month.]
>>
>> When I set up the mortgage I have a mortgage company account
>> (liability:MortgageXYZ), escrow (assets:MortgageXYZ Escrow) and
>> interest accounts (Expenses:Mortgage interest).  I determined I need
>> an asset account, (Assets:MortgageXYZ Property).
>>
>> What do I do with the actual asset account?  I see in the guide I give
>> it the total amount I paid for the house.... and how does thi play in
>> the monthly payment...  Ie.  I pay 100 to interest, 10 to the mortgage
>> principle and 4 to the escrow... for a total payment of 114.00 from
>> the checking account.  How does the actual asset get affected?
>>
>>
>> Or, is this not make sense?
>
> I think I understand, but let me try to translate it into GnuCash terms to make sure:
>
> (1) Initial mortgage setup
>    Assets:MortgageXYZProperty Dr $100,000
>    Liability:MortgageXYZ      Cr $100,000
>
> (2) Monthly payment
>    Expenses:MortgageInterest  Dr $    100
>    Assets:MortgageXYZEscrow   Dr $      4
>    Liability:MortgageXYZ      Dr $     10
>    Assets:Checking            Cr $    114
>
> So all you would need to do in GnuCash is enter (1) initially, then set up a monthly scheduled transaction to take care of (2) for you. Your Assets:MortgageXYZProperty account would remain untouched after the initial setup (1), except for home reno/depreciation and other pertinent events, as Alex Hill noted.
>
> Hope this helps,
>
> Yawar
>
> N.B. Just a little disclaimer that I am not an accountant and none of my emails should be taken as financial advice. Thanks.
>
>