Double entry Accounting and Asset, Liability, Expense, and Equity for Home!
If you can provide insight into any of this I would be grateful, I have read GnuCash help / tutorial, and did some searching online, I have not found the necessary information to understand this. Maybe I need to take an accounting class!
I am trying to sort out how to enter data for my existing 2 family house in GnuCash an accounting software. (If I can understand the basic accounting I don’t think the software is going to matter)
Current I have set up: (in the software)
I have Asset: Home (Need to know what “value” to use)
I have Liability: Mortgage (I am using outstanding principle)
I have Expense: Interest (expense monthly split entry from Mortgage payment in checking account)
Notes / Questions:
N: I have owned the house for 10 years but want to start tracking from this New Year 1/1/2014
Q: When I enter the “Home” as an Asset how do I determine the value to enter? Current Market Value? Or Amount I have paid to date (principle, repairs, etc…)?
Q: Don’t I have to somehow track this as equity? Tie it to Equity?
Q: Liability I am assuming is the remaining Principal? (Opening balance equals existing principal balance)
Q: Interest: monthly payments are made from checking account (split entry (Mortgage & Interest)
Q: Do I add rental income under expenses?
Q: How do I handle the Escrow (taxes and Insurance) they are rolled into the payment, maybe just split entry the Mortgage payment each month to include Loan, Interest, Taxes, Insurance? I think that should do it.