How to refinance a mortgage

[Aaron Laws]

On Fri, Jun 24, 2016 at 10:17 AM, JimR <KD1YV at oneyv.org> wrote:

> I had a 30 year fixed rate mortgage in GNUCash.  I have refinanced it to a
> 5/1 adjustable rate (same bank, if it matters).  The bank essentially
> closed out the old mortgage, and created a new one.
>
> How should I close out the old mortgage, applying principal from the funds
> of the new mortgage?
>
> Thanks,
> JimR
>

I'm not a professional accountant.

In general, in accounting, it should go into the books just as it is (as
much as possible). In this case,

old mortgage    oldbalance
new mortgage                   oldbalance

There may be more complications in the transaction. Is the new mortgage
balance the exact same principal as the old one at the time? I assume there
were expenses involved; were those paid by the new mortgage, or did you
provide a check to cover refinancing costs?