On Mon, May 4, 2020 at 2:26 AM flywire <flywi...@gmail.com> wrote:
> Sorry, another loan query. Going in circles and thoroughly confused by
> https://www.gnucash.org/docs/v3/C/gnucash-guide/loans_mortgage1.html
> which seems
> to cut out before the interest is paid and flip to making a loan.
>
> I have a loan account (say $1000 Liabilities:Loan) and the interest is
> calculated and added to the loan annually (say 30 June 19 $10 interest is
> added to Liabilities:Loan). On 29 June I pay $9 from Assets:Saving and let
> the rest increase the loan. Using cash accounting I need to track the $9
> Expenses:Interest-paid, and the current loan balance which is a combination
> of principle and interest.
>
> Direction to the best place in the guide would be useful.
>
Most loans (certainly mortgages) aren't allowed to grow like this, so the
manual doesn't cover it. When your interest accrues, it will look like this:
Expenses:Interest $10
Liability:Interest $10
and since you don't pay off all the interest every month, your payment
looks like this:
Liability:interest $10 (this reduces the account to $0
interest)
Assets:Checking $9
Liability:Note $1
Does that sound right?
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