Mortgage investment income

[Dale Alspach]

One way to think about this is to view this as two transactions. In the
first transaction you are making a loan. The second transaction is
receiving a payment.

Suppose in your example the actual check received is for $800 instead of
$1000. You take $100 from your checking account (asset) and transfer it to
unpaid interest (asset) and place the actual $100 with the $800 as if you
had given the relative the $100 as a new loan.
Now you receive a payment of $900 from the relative and allocate it as $750
interest income, $150 taxes.

Dale

On Nov 6, 2016 8:54 PM, "Securenym.net" <wroberts at securenym.net> wrote:

> Hi, all.
>
> I’m relatively new to gnu cash (and accounting for that matter).  I am
> trying to convert a spreadsheet that manages a mortgage I hold on a
> relative’s property.
>
> I’ve read the “Loan to a friend” docs, and google (actually ixquick)
> searched for how to do this.
>
> Here’s my problem.  The mortgagee is a more or less deadbeat.  It’s a long
> story. . .
>
> Here’s what’s supposed to happen:
>
> 1.  Mortgage prin & interest calculated on the last day of the month.
> 2.  Payment rec. last day of month, credited to P&I
> 3.  Property holder pays their own property taxes.
>
> This I can figure out.  Prin is credited to Mortgage in the Capital Asset,
> reducing the balance (split transaction)
> Interest is credited to present income in the Income section and placed in
> the checking account (current assets).
>
> As long as that happens life is good in gnu land.
>
> But, as it happens this particular relative doesn’t do that.  I now have a
> tax escrow to deal with as well, so I changed the setup to do this:
>
> 1.  Mortgage Asset (prin)
> 2.  Mortgage Interest (income)
> 3.  Tax Escrow (short term liability, as this is restricted funds to be
> used for taxes)
>
> Because several payments are missed each year, the unpaid interest was
> being paid by the end of the year.  So, rather than inflate the principle
> balance, I decided to carry unpaid interest in a separate account which the
> mortgage documents permit me to do.
>
> Next iteration:
>
> 1. Mortgage asset
> 2.  Mortgage interest (income)
> 3.  Tax Escrow (liability)
> 4.  Unpaid interest carried forward (???  long term asset, I think).
>
> So, my question is how is the best way to do this.  To give a concrete
> example of what is supposed to happen, the payment is $1000 on the last day
> of the month.  The interest is 750, the taxes are 150 and the principle is
> 100.
>
> This breaks down this way:  A check comes in for $1000 and is deposited in
> the Checking account.  the money is then allocated to tax escrow liability,
> present interest, past due interest and if any is left over, principle.
>
> When a check doesn’t come in, the interest is still due, but unpaid, and
> does not become income to me until it is paid.  (There is a minimum
> threshold income that the IRS insists on, but that hasn’t been an issue, at
> least not yet).
>
> So, how do I move present interest income from the income ledger to the
> unpaid interest ledger, moving it from an income item to an asset item?
>
> Thanks for any insight!
>
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