You may want to refer to the Capital Purchases topic for additional information.
To handle Mortgages, you need the following:
| An Asset Account such as "Property of the Church" |
| A Liability record describing the Mortgage, such as "Mortgage on Church Building" |
| A Fund Account such as "Church Buildings" representing the thing mortgaged, and containing an Opening Balance which gives the starting equity you have on the basis of start-up costs or down payments. |
| An expense account such as "Mortgage Principal Reduction". It would have the Accounting Grouping combo box selecting "26: Payment of Mortgage Principal". When you exit the combo box setting this grouping, a box will appear asking you to select the fund that is to receive the increase in equity based on use of this expense account. You would select the "Church Buildings" fund. |
When you write your mortgage payment check using Accounts Payable, you use the "Mortgage Principal Reduction" expense account, in addition to the "Mortgage Interest Paid" which accounts for the additional expense included in your payment.
When the check is created and posted, CB/DB generates an income journal entry as described in the capital purchases topic, which increases the equity in the Church Buildings Fund.