I have created a new loan for a car I purchased, I went through all of the steps, everything looked fine, clicked finish, and now the loan shows $0 under Liability Account - I expected to see the amount of the loan (-$28,000ish). When I put in a payment it starts showing positive amount under liability account . . .

Thoughts?

My loan creation summary: https://drive.google.com/file/d/1mvlHjEMaPKoK-ZCEoKJhUJ7vTAu9h7f3/view?usp=sharing

Resulting entry in my liabilities: https://drive.google.com/file/d/1ju5LXErL90YpgW6mNHahFvGat8zW6CTK/view?usp=sharing

I expect you did not specify a payout transaction. To solve the issue:

1. Create an asset account for the car
2. Enter a transfer transaction from the loan to the car's asset account with amount of the loan.

Over time you pay the principal to the loan account so the balance of it will shrink. To reduce the value of the car over time, create an expense category and name it whatever you want (e.g. Value adjustment). Once a year, estimate the remaining value of the car and reduce the balance of the asset account by entering an expense transaction against this category. It's a bit of work - not that much though - but you will gain a good overview of your networth.

Hope that helps.

I'm really confused when it comes to setting up a loan for a car. Can someone explain it to me in very simple terms?
Does it get setup as an asset or a liability? Any help someone can give me would be greatly appreciated.

richringer wrote:I'm really confused when it comes to setting up a loan for a car. Can someone explain it to me in very simple terms?
Does it get setup as an asset or a liability? Any help someone can give me would be greatly appreciated.

Loan is liability, the car itself is an asset.
So basically initially you should have asset and liability in balance. lets keep it simple and we buy a 10 000 €/$/£ car with loan.
YOu should have now .

Asset, lets name it like "new car",with value is 10 000
and liability "car loan", with value 10 000

To add to this: creating the loan (account) does not change anything until you transfer money from the loan account to another account (e.g. that car asset account). To repay your loan, you transfer money from an asset account (e.g. checkings account) to the loan account.