Best way to handle multi-day "split" transaction?

Buddha Buck blaisepascal at gmail.com
Mon Nov 28 15:40:49 EST 2016


On Mon, Nov 28, 2016 at 11:40 AM replicon <replicon at gmail.com> wrote:

> Correct, this is more of a "how do people typically do this stuff in
> GNUCash"
> question, and yes, the "I want" should be read as "I'm required to" - I
> didn't worry about the languaging, because I'm focused on how to best model
> this in GNUCash. :-)
>
>
In my personal opinion, a transaction in the accounting sense takes place
at an instance of time. Different people may sensibly disagree when that
instance of time is, and record it differently in their books, but in any
particular set of books, a transaction happens at once. It also means that
if money moves from place to place at different times, it is reasonable to
model it as separate transactions.

In your case, you are buying a house and the land it's on from Bob, whom
you have previously lent money to. It is unclear what is meant by "made
those payments part of the purchase price". Do you mean that if he owed you
$10,000, and you bought the property for $100,000, then you only paid
$90,000 in cash?

If so, here's how I would have recorded the transactions:

2016-01-01 Pay off Bob's back property taxes to get a clean title on 123
Elm St.
Debit Asset:Loan to Bob $5,000
Credit Asset:Cash $5,000

2016-02-01 Loan Bob moving expenses to vacate 123 Elm St.
Debit Asset:Loan to Bob $5,000
Credit Asset:Cash $5,000

2016-03-01 Closing on 123 Elm St
Debit Asset:123ElmSt $100,000
Credit Asset:Loan to Bob $10,000
Credit Liability:Bank:Mortgage $80,000
Credit Asset:Cash $10,000

You should probably run this past your accountant, giving the full story,
to make sure he agrees with the bookkeeping. In your story, I heard nothing
that would affect equity, income, or expense accounts at all. Paying Bob's
taxes is not your expense, it's his, and you have an expectation to get
your money back as part of the house sale.

For your second quirk, where you want to keep track of the value of the
building and land separately, I would use subaccounts, along the lines of:

Asset:123ElmSt:Land
Asset:123ElmSt:Building
Asset:123ElmSt:Building:Depreciation

For the most part, the first and second accounts will have one transaction
in them, and hold the original basis values of the property. The
Depreciation sub account will have a negative value, and will in most
reports be summed up into its parent account(s). That is, if you have a
report that shows the value for Asset:123ElmSt, it'll show the total
depreciated value of the property, including both the house and the land.

Again, run this past your accountant to verify that it is what you should
do in your situation


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