[GNC] How to balance correctly a particular transaction which involves debt?

[Christopher Lam]

I wouldn't add an entry into Expenses:shop -- you didn't exactly spend your
money into this shop.

Spending/lending money:
Liability:credit card -$50
Asset:Friend owes me +$50

Recovering funds:
Asset:Friend owes me -$50
Asset:Cash or bank +$50

HTH

On Mon, 21 Sep 2020, 9:40 pm Daniel Fishman, <quantera at gmail.com> wrote:

> Hello,
>
> Suppose that you go with your friend to a shop, and then a friend
> remembers that he forgotten his credit card and asks you to pay
> for his merchandise. He intends to return the money later. You pay
> in the shop (for example, buy a book) using your credit card. Then
> a few days later the friend returns his debt - for example, by paying
> you cash.
>
> I want to document those facts in gnucash.
>
> Since the payment to the shop was made by the credit card, an account
> 'Expenses:<shop name>' is debited, while an account 'Liability:<credit
> card name>'
> is credited. I also want to make it explicit that a friend incurred
> debt due to this transaction. Therefore, it seems to me that this
> transaction
> should also contain a split which debits an account
> 'Assets:Accounts receivable:<friend's name>'. But which account should be
> credited to balance the transaction? Suppose that I credit some
> artificial account, like 'Equity:Balancing account' and succeed to
> balance the transaction. Then when the friend pays his debt, an account
> 'Assets:Accounts receivable:<friend's name>' should be credited, and
> an account 'Assets:Cash' should be debited, but what about an account
> 'Equity:Balancing account' - should it just be left as is (that is,
> not debited)? It seems a bit artificial.
>
> What is the accepted way to document such transactions?
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