[GNC] Suggestions for personal use of GnuCash

[David Cousens]

Richard,

Rich Shepherd's approach is aprt of the way to accounting for a loan made
but one would not usually use the business features for doing this. When you
borrow money the loan is setup as a liability account as you are obligated
to pay it back. Where you make a loan it will be setup as an asset. You will
need to create an appropriate loan account depending upon the term of the
loan. If it is short term and to be repaid within an accounting year you
would set it upunder current assets otherwise you can use a general asset
account. E.g.

Asset:Loan

Normally when accounting for a loan you need to know what the principal
originally was, what  interest has accumulated on the loan, what repayments
of the principal have been made and what the current outstanding value of
the loan is. This can be achieved  by creating a number of subaccounts to
the above account as follows with the Asset:Loan account as a placeholder
account only. 

Asset:Loan
Asset:Loan:Principal
Asset:Loan:Accumulated interest
Asset:Loan:Repayments

When you make the loan, you credit (withdraw from) an appropriate bank
account and debit the Asset:Loan:Principal account by the same amount.

When you add interest to the loan amount, you debit the
Asset:Loan:Accumulated interest account and credit an appropriate
Income:Interest account.

When the creditor makes a payment to you, you credit the
Asset:Loan:Repayments account and debit an appropriate bank account for the
payment loan.

The total displayed by the placeholder account will be the outstanding loan
amount.

If the transactions are regular you can use the scheduled transaction
editor. Where values change , e.g. interest the amount of the scheduled
transaction can be edited to the correct value.

See https://www.gnucash.org/docs/v3/C/gnucash-help/setup-accounts.html for
deatils of creating and editing accounts.

David Cousens



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David Cousens
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