Kalpesh When you take a loan out against an asset as collateral, unless you default on the loan you still have the asset in your control so the asset account is not affected by taking out a loan against it. You depreciate it as you would even if it isn't collateral for the loan and the depreciation is an expense. You may be obligated to keep the asset for the period of the loan however unless you renegotiate with the bank to use other assets as collateral.
The only account you need to create are the usual accounts for managing a loan as a liability. When you refinance any fees/costs associated with completing the previous loan and starting the new loan are going to be expenses. The first loan will be closed by the amount of the closing payment to it. Basically it should look like Asset: Bank Dr Loan principal Liability:New Loan Cr Loan principal Asset Bank Cr loan fees Expenses:Loan Fees Dr Loan Fees Asset Bank Cr amount to finalize previous loan Liability:Old loan Dr amount to finalize previous loan and any new asset purchases would be processed as a credit to the bank account and a debit to a new asset account. The last one would be repeated for any other loans you were finaizing from the new loan with the corresponding amount to close each loan as the amounts of the Dr and Cr. You could do the above set of transactions as a multiplit stransaction or a series of simple 2 split transactions using a tag to identify that they all belong to the same refinance operation. Same approach with the second refinancing. David Cousens On Sat, 2023-01-28 at 10:19 -0500, Kalpesh Patel wrote: > Need some thoughts here as to how-to setup my accounts. Disclaimer: this may > somewhat dwell into accounting side as well but given the wide breadth of > the user community wanted to hear all different ways to do setup GNC to > track everything down to last cent if possible. > > > > Situation is as follows: > > > > - An asset was purchased with cash > > - Took a loan out against it a year later > > - The loan was refinanced 8 years later which paid off two other > assets in the process in addition to previous loan > > - The loan was refinance again one year later which paid off > previous loan plus it helped finance another asset > > > > How should accounts be set up in GNC if someone wants to track the cost of > financing plus the appreciation/depreciation that may be taking place along > the way. > > > > > > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
