Thanks Steve, Michael, and Adrian.Steve answered it, Adrian explained, and
Michael made the point about interest and taxes. All good and helpful.
On Monday, August 24, 2020, 5:18:38 PM EDT, Michael or Penny Novack
<stepbystepf...@comcast.net> wrote:
>
> On 8/24/20 11:19 AM, Stan Brown wrote:
>> On 2020-08-24 09:01, Fran_3 via gnucash-user wrote:
>>> For a posted liability of say $1,000with an agreement to pay in 10
>>> monthly installments of $100 each.How do you enter those monthly
>>> payments and...1 - have the payment applied to the liability
Also, something seems to have been left out. A liability of $1000 paid
off by ten payments of $100 would mean this was a no interest loan.
More usually, you are paying interest. So some of each payment is a
reduction of the liability and some interest expense. A split
transaction. Even if this were a purchase on an installment contract (so
no explicitly stated interest) strictly correct would be to assume what
rate should be implied and enter the liability at this discounted
amount. These days might not matter for personal finances but I bet it
does for business since the interest would be a deductible expense.
Mind, I have never looked at the "installment sales" or "installment
purchases" parts of the1040.
Michael D Novack
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