[GNC] A question on loans

[Adrien Monteleone]

I concur with Stephen here.

The answer to your question (as with all accounting questions in my opinion) is to model as closely as possible the real-world transactions.

As I recall from your earlier post, you stopped using GnuCash for several years, now want to pick it back up and be all ‘caught up’? (or did you just not record loan activity, in which case how did you keep your checking account straight as you made payments?)

You have 2 choices:

1. Fill in all the actual interim historical transactions.
2. Make a handful of aggregate transactions modeling as close as possible where money flowed. (as Stephen noted, that increased loan principle had to go somewhere, ‘where’ will tell you how to balance that transaction)

Note, you don’t have to enter transactions with the current date. You can enter them with their actual historic dates. (especially since you said this is just for your own personal use and not any legal filing purposes)

A third choice is to archive the file and start fresh from today with accurate current balances.

Regards,
Adrien


> On Nov 21, 2019 w47d325, at 12:27 PM, Stephen M. Butler <kg7je at arrl.net> wrote:
> 
> On 11/21/19 10:06 AM, Mark Phillips wrote:
>> David,
>> 
>> Thanks for your emails and explanations. What I am really looking for, is
>> how to do this transaction:
>> 
>> Increase the loan amount by $30,000 to bring it to the current value.
>> 
>> I don't know where to put the offsetting entry for the $30,000. It does not
>> go into checking, as I don't have a windfall of $30K in the checking
>> account or against the Condo asset, nor in an expense account. So where
>> does it go?
>> 
>> Mark
> 
> 
> I'm trying to remember your earlier email on this.  I think you said you
> consolidated some debts.  Was that 30K worth?
> 
> Some other areas that would be expenses:
> 
> 1.  Is some of that interest that you paid?  That would be an expense
> item and would not reduce your loan balance.  Perhaps you put the entire
> payment against the loan when part of it was to pay the interest.
> 
> 2.  Escrow account?  My monthly payment includes an amount that goes to
> another asset account for Mortgage Escrow.  Out of that the pay the
> property taxes and insurance.  When they pay those, then it would be an
> expense for you but would reduce the Mortgage Escrow instead of the
> loan.  Perhaps you booked escrow against the loan and erroneously
> reduced your loan amount.
> 
> 3.  Fees -- did the consolidation cost you some fees that were added to
> the loan balance.  Those should be booked as expenses.
> 
> 4.  Is there a HELOC involved were you pulled some funds out?  That
> would have increased your loan balance and the offset would depend on
> what you did with those funds.
> 
> You need to figure out why the bank shows 30K more in funds due them
> than you show in GnC.  Depending on what happened would indicate how
> those funds should be booked.  Worst case you may have to book it
> against equity for "unknown/unremembered items".
> 
> Your personal CPA should be able to provide better guidance here.  All
> of the above is just speculation.