Starting with GNUCASH
Jeff VanderDoes
vanderdoes at msn.com
Fri Dec 7 22:34:42 EST 2012
Thanks so much for the feedback from all! Now a follow-up question.. Most
of my entries for mortgage payment come from online transactions from bank.
Since I don't know the split out between principle interest, and escrow.
(I can do some homework and figure it out eventually... I can est pretty
close my escrow) Before I put transaction in in final form (ie figure
interest, principle, escrow) or is there a way to bring it and later split
it out later?
Thanks,
Jeff
On Fri, Dec 7, 2012 at 5:53 AM, Mike or Penny Novack <
stepbystepfarm at mtdata.com> wrote:
>
>
>> Loans have me a little baffled. Say mortgage has payment and some goes to
>> reduce principal and some goes to escrow for taxes and insurance and
>> interest on loan goes to expense account. Do I use the accounts and minus
>> from checking and add to escrow. then do another set of transactions minus
>> from escrow and add to interest expense; credit from escrow and debit (I
>> get debit and credit confused) mortgage loan... then when taxes paid
>> credit
>> from escrow and debit home insurance (expense account)? Do I ever have a
>> transaction to some type of equity account?
>>
>>
>>
> You can do it in separate transactions but since your payment is actually
> a single item from your bank account more normal would be to use a SPLIT
> transaction (a transaction involving more than two accounts). The escrow
> account is an asset belonging to you (your property) except not under your
> control. Just like another bank account (some bank account controlled by
> the institution processing your mortgage). It should be in your books as an
> asset account. Then when you get a statement from the institution
> processing your mortgage that they have used some of these funds (to pay a
> tax bill, to pay an insurance bill, whatever) you enter a transaction to
> reflect that.
>
> So each mortgage payment would be:
> debits:
> Loan principle
> Loan Interest
> Escrow
> credits:
> Bank account (this would be entered first, then hit SPLIT, adjust the
> other side amount to the first account you want to do and enter that
> account, then proceed with the remaining amount till all allocated)
>
> Michael
>
> PS -- As always I will repeat, gnucash AUTOMATES the bookkeeping, posting*
> from journal to ledger, but that doesn't substitute for knowledge about
> basic bookkeeping. This automation is important/useful since transcription
> errors during hand posting was one of the major sources of errors in the
> old pen and ink on paper days. If the documentation provided with gnucash
> isn't enough for you, get a book on "basic accounting". We can help you
> with "how to do it using gnucash way" but you may still need help with
> "what should I be trying to do".
>
> --
> There is no possibility of social justice on a dead planet except the
> equality of the grave.
>
>
>
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