[GNC] Entering my real estate and mortgage?

[Michael or Penny Novack]

> HERE you are discussing transactions that were NOT enterable ib your books (which are irrelavant to books begun 31.12.2023
>
> I would enter it as follows (let's assume the real estate total cost is
> 500k):
>
> Assets:Fixed Assets:Real Estate - increase 300k
> Liabilities:Loans:Mortgage Loans: - increase 300k
> Assets:Fixed Assets:Real Estate - increase 150k (downpayment)
> Assets:Current Assets:Checking Account - decrease 150k (downpayment)
> Assets:Fixed Assets:Real Estate - increase 50k (reservation)
> Assets:Current Assets:Checking Account - decrease 50k (reservation)
>
> If the above is correct, there's another question. I started using GnuCash
> this year and put the opening balances of all my accounts dating back to
> 31.12.2023, but I bought my apartment back in 2018. If I look at it now, I
> would have a huge negative balance on my checking account (because the
> money was spent in 2018 but I have the opening balance from 31.12.2023).
> Should I just add another "opening balance" in my checking account which
> equals both the downpayment and the reservation fee?

If what I am about to say confuses you, come back to this line and 
think---- if on 31.12.2023 you had 10,000 in your checking account, of 
what relevance is it (on 31.12.2023)
  how it got there. All that matters NOW is how much.

When you opened your books 31.12.2023 you should have entered AS OF THAT 
DATE

"assets":"fixed assets":"Real Estate":"House":"basis" debit  
500.000          (credit equity 500.000)   that's what it cost <NOT 
relevant where money came from>

"assets":"current assets":"bank accounts":"bank y":"checking"      debit 
checking account balance of that date (credit equity that amount   If 
seems odd, you could have current assets other than in bank accounts, 
could have accounts at multiple banks, could have accounts other than 
checking. You can always do it simpler at the start and modify your CoA 
later as needed.

"liabilities":"mortgages":"mortgage-abc"   credit balance still owed 
31.12.2023  and debit equity that amount

BTW ---- I would use as description "opening entries" and of course if 
you use the Starting Mount facility the equity side would have been done 
for you. Since I learned pen and ink on paper I use explicit transactions.

NOTE: What jurisdiction? Does your mortgage payment include an amount 
paid into an escrow account from which insurance and taxes are paid. If 
so, the balance as of 31.12.2023 would be an asset "escrow account"    
Legally yours even though you can't access it.

Michael D Novack