Double Entries?

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.

Best Answer

  • kmlenha49
    kmlenha49 Member ✭✭
    Answer ✓
    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.

Answers

  • Mark1104
    Mark1104 Member ✭✭✭✭
    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
    q_lurker SuperUser ✭✭✭✭✭
    @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
    kmlenha49 Member ✭✭
    Answer ✓
    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.
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