How to record mortgage payments in Nojumi

Accounts

You should ensure you have created the following accounts in the Chart of Accounts:

1. Property Asset Account

   1. Type: Asset - Long Term
   2. Account No: 1521
2. Mortgage Interest
   1. Type: Expense - Other
   2. Account No.: 5056
3. Mortgage Liability Account
   1. Type: Liability - Long Term
   2. Account No.: 2515

Initial Journal Entry

As a first step, enter the beginning balance of the mortgage of a journal entry like the following:

Mortgage Payments - Method 1 (Preferred)

Using this method, you would enter a journal entry such as the following for each mortgage payment. You will need to review your monthly statement to determine how much was paid towards principal and how much of your payment was towards interest.

Mortgage Payments - Method 2 (Easier)

Using this method, you won't have to determine the split between the payment towards principal and interest for every mortgage payment, as you would enter a single interest payment for the entire year at the end of the year. While this method is easier administratively, it results in your books not being entirely accurate until the interest expense payment at the end of the year is entered. 

If you wish to use this method, you can add a transaction rule that connects the entirety of the mortgage payment to the Mortgage Liability Account (2515).

At the end of the year, you would then add the following journal entry: