[GNC] Mortgage set up

[Michael or Penny Novack]

> I have not done this in gnucash, but here are some comments.

I don't think gnucash existed yet when I last had a mortgage. Still 
using pen and ink on paper.

> 1. The escrow account is an asset, just like a bank account.
>
> 2. Your mortgage payment does the following:
>    debit Escrow, increasing this asset
>    debit interest expense, increasing this expense
>    debit loan principal liability, decreasing this liability
>    credit cash, decreasing this asset

Correct

> 3. When taxes or insurance are paid from the escrow account, this happens:
>    debit the tax or insurance expense, increasing this expense
>    credit the escrow account, decreasing this assett the equality of the grave.

Perhaps, because maybe different these days. Back then these did not 
appear except on the ANNUAL escrow account statement which would show 
all payments into and from the escrow account. So the payments (tax 
payments, insurance payment, etc.) would be entered then when data 
available (was able to enter the monthly "in" amount as that was known). 
The annual escrow statement would also give the next year calculated 
monthly escrow amount necessary to keep the escrow balance positive 
throughout the entire year (a "cash flow" issue). .

Michael D Novack