Double Entries?

kmlenha49

I set up a Home Equity LOC account and get that updated online. I have my payments taken out of my checking account and I use 2 categories for the principal and interest. But when I look at a cash flow statement the amounts offset so the amounts paid for principal and interest are both zero. How should I categorize the download transactions in the LOC account so they do not zero out the expense categories.

kmlenha49

Thank you. I finally worked it out. The direct download of the LOC from the bank had the amount of the principal decreasing the balance but I had the category wrong. I just changed the category into the same account and now it does not give me a zero balance on the expenses.

Mark1104

On the Cash flow report under the Banking section, there is an "advanced" tab. How do you have the 'transfers' option set? Exclude all or Include all?

q_lurker

@kmlenha49:  I am not using an LOC acocunt and if I did, I would be cautious with respect to the setup and downloading to it (likely I would not download to it).  I believe the conventional wisdom has been to setup an LOC account as a credit card.  

With that precursor, I would expect your checking account transaction to serve as a split transaction with the Interest component going to whatever interest category you are using and the principle component going in as a transfer to the LOC account (paying off that part of the balance).  

A subsequent download for the LOC account would (I'd expect) match the principle payment to the transfer from the checking account.  I suppose a downloaded interest charge transaction (adding to total IOU) could also be recorded against the selected interest category, in which case interest payment from the checking account would also be a transfer from the checking account.  Your LOC records would look like

a) Principle payment from [Checking] reducing total balance
b) Interest change on account adding to total balance
c) Interest payment from [Checking] reducing total balance.

Obviously (?) the two transfers from [Checking] could also be one transaction.      

kmlenha49

Thank you. I finally worked it out. The direct download of the LOC from the bank had the amount of the principal decreasing the balance but I had the category wrong. I just changed the category into the same account and now it does not give me a zero balance on the expenses.