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setting up a mortgage loan dont affect balance sheet

Posted by sagy 
setting up a mortgage loan dont affect balance sheet
April 07, 2013 12:07AM
i did as the tutorial video of sitting up a mortgage loan account but when went to reports/ balance sheet , there is no long term liability ? why so ?
Re: setting up a mortgage loan dont affect balance sheet
April 21, 2013 10:20PM
Hello Sagy,

Disregard previous video for your example and try it this way below.

The Asset will always be the same until you sell the house, then it clears off the books.

Posting the payments
DR - "Mortgage" liability account
DR - Interest Expense
CR - Accounts Payable

When you sell the property, you offset it against the "Other Asset" account. The balance will be your profit/loss.
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