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Why Do Loans Show $0 Under Liability Accounts After Creation

kde-jmadero
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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?
kde-jmadero
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User avatar ipwizard
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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.


ipwizard, proud to be a member of the KMyMoney forum since its beginning. :-D
openSuSE Leap 15.1 64bit, KF5

 
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