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

djboissy

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

Frankx

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

Frankx

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

djboissy

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)