[GNC] Loan

[Stephen M. Butler]

On 2/7/21 1:36 AM, Petros Tenezakis wrote:
> How do set up initital balance for a loan. I owe for an example 10000 USD to Example Bank

I find it best to break actions like this into the different components.

1.  First item is to realize this will result in you having a 
liability.  This means you will need to setup an account in the 
liability section of your Chart of Accounts (COA).
     If you have other liabilities (loans) with this same bank, you 
should make each one a sub-account under a placeholder account for the 
bank.  That way yo u know at a glance the total outstanding amount you 
owe this bank.

2.  Next, the initial transaction will set the opening balance and also 
track where that money went.  Perhaps it was deposited directly into you 
checking account (an asset) or it went to purchase a house (also an 
asset with some expenses for the closing costs) or was used to pay off 
credit-cards or other short/long-term loans (liabilities).  The main 
item to remember is that the liability will be the credit side of the 
transactions with the other splits being the debit side.  This means 
that an increase to an asset goes on the debit side of that account as 
also an increase to expense.

3.  Finally, be sure you have the correct date on this transaction that 
all of the debits add up to the $10,000 credit .

4.  Now you can setup a schedule payment plan to pay off this debit.  
You can even add a transaction to the scheduler so that the payment 
transaction will show up in the proper accounts each month.

-- 
Stephen M Butler, PMP, PSM
Stephen.M.Butler51 at gmail.com
kg7je at arrl.net
253-350-0166
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