Double Entry of Informal "Loan" & Repayment

[Mike or Penny Novack]

On 1/14/2018 1:57 PM, Keith Lewis wrote:
> I'm new to GC, longtime Quicken user. This is a double-entry accounting question rather than a GC question-hope that's okay in this mailing list. I made a purchase for a gift w credit card and used expenses:gifts to balance. Afterwards, a friend wanted to help with the gift and so paid me half with cash. I think I should deposit that cash into assets:wallet and balance with expenses:gift. But isnt the cash from my friend income? Does this sound right to you? Now imagine my friend had offered ahead of time to help pay for the gift, but didn't immediately have the cash. I think I could record the transactions as above or set up a "loan" account to track the "loan". IOW split liability:creditcard -> expense:gifts + liability:creditcard -> loan; then when he pays me back, loan -> asset:wallet.Thanks for your time,Keith
No, not income but an adjustment to an expense. You (later) learned that 
you were not paying for all of the gift but sharing the cost. So an 
adjustment transaction: (when he pays you)
debit  wallet
    credit    gift expense
        description could explain -- say "friend is paying for half the 
gift"

Now let's examine the second case where the friend agreed to do this but 
hadn't yet. In other words, you paid for the gift but he owes you for 
that share of it. I am assuming that you mentioned credit card because 
that is HOW you paid for the gift.

when gift purchased
debit    gift expense (for your share)
debit    owed by friend (that is an ASSET type account)
      credit    credit card (for the purchase price

when he pays you back that's a transfer between assets
debit   wallet
      credit owed by friend   (that "asset" is now zero)

Michael D Novack




Michael D Novack