Income Statement report to show loan paydown amount?

[Adrien Monteleone]

Check out the Tutorial and Concepts guide.

(The entries I list below are simplified and don’t include multi-level account names, yours will vary)

There are two ways to handle credit cards.

The method I prefer is to enter any charges on the card as follows:

Dr. Expense
Cr. Credit Card Liability

(as a general rule to help me keep things straight, I enter expenditures in the account where the money is coming from - in this case, I’d enter it in the credit card register. If I were paying cash, I’d enter it in the cash register, and if writing a check or using a debit card, I’d use the checking register, etc.)

Now, regardless of when you pay the credit card balance, the amounts for each expense account will show up in their proper periods. (as they should)

Concerning loans, this is a bit different.

Generally, loans are for acquiring assets, not expenses.

If you used the proceeds of a loan for expenses, those purchases would require their own transactions.

First you’d have the loan transaction:

Dr. Cash
Cr. Loan

Then when you spend some of that money - say on home improvements you’d enter:

Dr. Expense:Home Improvement
Cr. Cash

Making a payment on a loan or a credit card is NOT an expense. It is a shift from an asset to a liability, in this case, a reduction in assets, and a reduction in liability. (taking out a loan or credit line is the opposite for both - they increase) Charging on a credit card is where the expense happens.

The place to see this change is NOT on the Income Statement. (also listed separately as Profit & Loss Statement) That report will only show revenue and expenses, not changes in assets and liabilities. (which is what happens when you take out or pay off loans/credit)

The proper report for that is the Balance Sheet.

A Balance Sheet however, is not a time-period report. It is a snapshot. If you want to see the change from one date to the next, you’ll have to run two Balance Sheet reports, one for the start and end dates, then manually calculate the changes.

Another report you might find useful which will show ALL money movements is the Cash Flow report.

This will show all exchange of funds into and out of selected accounts. By default, this will show pretty much everything, but you could limit it to just your cash/checking accounts and your credit/loan accounts, save it with a special name and run it as desired for any period.

Regards,
Adrien

> On Jan 9, 2018, at 12:40 PM, Tj Junior <tjjunior222 at gmail.com> wrote:
> 
> Wondering if this is possible, the income statement appears to be the
> closest I've been able to find.  Looking to find a summary of income and
> expenses summarized (e.g total over 1 year rather than by transaction), but
> I'd like it to show what's paid towards loans as well.  The income portion
> is already there, it's the expense portion I'm having trouble with.
> 
> Income summarized for a period:
> Salary
> Bonus
> etc
> 
> Expenses summarized over the same period:
> Mortgage interest
> Mortgage principal
> Insurance
> Groceries
> etc
> 
> I can get it to show the mortgage interest portion easily as it's just an
> expense account, but is it possible to also show the decrease in the loan
> principal without manually calculating it outside of the report?  The
> tricky part seems to be that a payment against a loan account should show
> as the lowering of outstanding principal, but payment against a credit card
> account should show just the expense account items in that account (not a
> lowering of the outstanding total credit).  Would love any thoughts or
> suggestions!
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