[GNC] Entering my real estate and mortgage?

[Boniforti Flavio]

Hi Michael.

Thanks for helping. In fact just reading your first sentence, made it
become clear: opening the books on 31.12.2023 means that every previous
transaction has already been accounted for.

I'm in Switzerland and there's no thing like the escrow account you've
mentioned - thanks.

F.

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Am Sa., 28. Sept. 2024 um 23:54 Uhr schrieb Michael or Penny Novack via
gnucash-user <gnucash-user at gnucash.org>:

>
> > 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
>
>
>
>
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