Changing Funds

[hhaggard]

We have a mortgage loan that I had set up in a fund by its self, now the financial board wants it set up in Gen Operating, as they have set a budget amount for the loan payments. The budget is for what our payments would be for the year as a total, including principal and interest. Also I'm not sure how to put this in the budget. Hope someone can help me.

I have it set up like this:
20-1110-000 DB Bldg Fund Checking
20-2016-000 CR Mortgage Payment Prinicpal
20- 5615-000 Interest

[JohnDMeyers]

version 10 you can budget on an asset or liability as well as income and expense.

Therefore, calculate what the amount will be that will go toward the principle and budget that on 01-2016-000, and the interest budget on 01-5615-000.

When you run your budget report, be sure to include liabilities in the choices. (it isn't selected by default).

[hhaggard]

Thank you for your reply. We use version 9, however I can budget on liability and expense line items. If we pay addional payments on the principal, how will this affect my budget? My question now is do I need to set an asset line for this loan? If so please show me how to do this.
Thank you

[JohnDMeyers]

Here are all the transactions in a typical scenario:

Receive the mortgage from the bank:
01-1110-000 General Checking DB
01-2016-000 Mortgage CR

Pay for the building:
01-1110-000 General Checking CR
01-1610-000 Building Asset DB

Make payments on mortgage:
01-1110-000 General Checking CR (whole payment amount)
01-2016-000 Mortgage Liability DB (principle amount)
01-5615-000 Mortgage Interest DB (interest amount)

If you set up a budget for 12 monthly payments and make extra payments, then your budget will show that you are over budget. You could estimate the amount of overpayments and build that into your budget.

You should get an amortization schedule to help with the budgeting of the principle vs interest amounts.