You’ve already recognized the income, so the realized income shouldn’t go in 
Income at all. Why not just a credit to Assets:Notes:Note 1 and debit to 
Assets:Cash or whatever your cash account is?

> On Mar 4, 2023, at 4:28 PM, Jasel17212 <[email protected]> wrote:
> 
> I'm looking for some input on how to book the following.
> 
> Let's say I've loaned someone $1,000. Each month I receive PIK interest 
> <https://www.investopedia.com/terms/p/paymentinkind.asp> on that note in the 
> amount of $10.00. I make an entry as follows:
> 
> 2023/01/01 * Note 1 PIK Interest
>         Income:Interest:PIK Interest    -10.00 USD
>         Assets:Notes:Note 1
> 
> Even though I haven't received this money as cash, I choose to include this 
> PIK interest in my tithes calculation:
> 
>  = /^Income/
>          (Liabilities:Tithe)           0.10  
> 
> When the note eventually pays off, my CPA needs to know that all of this PIK 
> interest has now been fully realized. I could back the accumulated PIK 
> interest out of the "Income:Interest:PIK Interest" account and put it into an 
> "Income:Interest:PIK Interest Realized" account, but this messes up my 
> automatic tithes calculation. My other thought is to add the realized 
> interest to a virtual "Income:Interest:PIK Interest Realized" account, but 
> now my income reports are off unless I remember to exclude one of the two 
> income accounts depending on whether or not I want a cash basis view or 
> accrual view of my income.
> 
> Anyone have thoughts on a good way to handle this?
> 
> Thanks
> JL
> 
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