Help with tracking a student loan

[whwtan]

On 22/3/2013 7:00 AM, Abraham Guerrero wrote:
> I just started using GnuCash and I would like to track my student loan which
> I've mostly paid off.  I tried following this online guide:
>
> http://www.myinvestmentblog.com/tracking-student-loan-gnucash
>
> but I still have questions on some things that are not clear.
>
>   
>
> 1.       This guide says to credit my checking account for the loan amount
> and to create a liability for an equal amount.  My issue with this is that
> the money did not actually go to my checking account, it went to pay my
> tuition.  The other issue is that I'm not sure whether I should be tracking
> my loan from its original start date or from now.  It seems that starting
> from now would be the better idea.
The guide assumes you borrowed the money, put it in your bank and then 
paid your fees with it. So that's 3 steps/transactions.
So what you are doing isn't exactly too different if you think about it 
except you "skipped" putting the money into your account.
Do it this way..You have a liability account, instead of having your 
checking account for the other equal amount, expense it under your 
Expenses:Education account.

If you are starting from "now" you need to be quite clear exactly how 
much money you owe on the loan.
> 2.       I also would like to know how to properly enter payments for the
> loan.  It seems that I should place one portion into a principal payment and
> the other portion into an interest paid section.
To better understand this portion, you should read up about splitting 
your transaction.
So what you are doing is paying of what you owe (amortizing your 
principle) and paying an interest at the same time (which is an expense)

Say you paid $110.
$100 dollars goes of to reducing your debt/liability.
The other $10 goes to paying your interest.
So you have $110 going out from your current account.
The other side goes to reducing your liability by $100 and also 
expensing $10 as "Interest Paid".

> 3.       Lastly, should I be tracking my investment real estate under the
> same file as the rest of my information?  The real estate is in my name and
> I am not using an LLC or business to process any transactions.
It makes sense to track it since you are trying to look at yourself as 
one single entity.

I am not an accountant and have never had a single day of schooling in 
accounting/book keeping. This is just what I've learnt over time so if 
you have professional advice I would say listen to them instead.

William