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

[Stan Brown]

On 2020-09-21 06:37, Daniel Fishman wrote:
> 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.
> 
> Since the payment to the shop was made by the credit card, an account
> 'Expenses:<shop name>' is debited, 

I don't think so. You have incurred no expense. Instead, you have
created an _Asset_, "Loans to friends" or something similar.

> while an account 'Liability:<credit card name>' is credited.

Correct.

> 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>'. 

Not "also" but only. And of course you would put the friend's name in
the Description or Notes field, unless he does this often enough that
you want a specific account for your loans to him.

> 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, 

Exactly right.

> but what about an account
> 'Equity:Balancing account' - should it just be left as is (that is,
> not debited)?

There shouldn't be one, at least not relative to this transaction.

-- 
Regards,
Stan Brown
Tehachapi, CA, USA
https://BrownMath.com
https://OakRoadSystems.com