how do i set up a new loan with a down payment?

I am an accountant and i'm confused. What account gets the down payment transaction?

Best Answer

  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    Accepted Answer
    Hi @djboissy,

    The down payment gets posted to the as a credit to the cash account.  Here's an example:

    House purchased for 100.000.00 with a 25,000.00 downpayment and 75,000.00 mortgage.  Entry is as follows:

    (Debit) House a/c (asset acct)                           100,000.00
    (Credit) Mortgage Loan Payable (liability acct.)                      75,000.00     
    (Credit) Checking a/c (asset acct)                                            25,000.00               

    Frankx

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Answers

  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    Accepted Answer
    Hi @djboissy,

    The down payment gets posted to the as a credit to the cash account.  Here's an example:

    House purchased for 100.000.00 with a 25,000.00 downpayment and 75,000.00 mortgage.  Entry is as follows:

    (Debit) House a/c (asset acct)                           100,000.00
    (Credit) Mortgage Loan Payable (liability acct.)                      75,000.00     
    (Credit) Checking a/c (asset acct)                                            25,000.00               

    Frankx

                      Quicken H&B-Subscription Ver. 34.24 - Windows 10-Home Version
                                             - - - - Quicken User since 1984 - - - 
      -  If you find this reply helpful, please click "Helpful" (below), so others will know! Thank you.  -

  • djboissy
    djboissy Member
    So set up the loan and a asset, connect the asset, and debit the down payment directly to the asset? (I get the credit is to the cash account)