Mortgage Record Keeping

Tracking Loan Balances

Three accounts and four sub accounts need to be set up; MORTGAGE PAYMENT (901), MORTGAGE PAYABLE (60), Principal Paid (60.1), Interest Payable (60.2). (MORTGAGE REDUCTION (900), and Principal Reduction (900.1), Interest Added (900.2). Main accounts are capitalized and sub accounts are lower case.

Setup Accounts

1. Go to Maintenance and select Edit Accounts.
2. Select new account button.
3. Highlight account type as local fund.
4. Type in ID number.
5. Type in account name (capitalize main account).
6. Uncheck tax deductible box.
7. Mark sub account box for accounts 60.1 and 900.1
8. Select down arrow button, scroll and select proper main account

   60.1 (Principal Paid) main account is MORTGAGE PAYABLE
   

   60.2 (Interest Payable) main account is MORTGAGE PAYABLE
   

   900.1 (Principal Reduction) main account is MORTGAGE REDUCTION
   

   900.2 (Interest Added) main account is MORTGAGE REDUCTION

Setup Initial Balances

1. Go to Accounting and select “Make General Journal Entry.”
2. Under memo type “loan setup.”
3. Leave button filled for deposit and interest earned.
4. Select bank account as checking. Do not enter anything for income or expense (this allows $0 entry).
5. Under accounts, type "60 (MORTGAGE PAYABLE)" and under expense, type in the mortgage principal. Type in "900 (MORTGAGE REDUCTION)" then under income, type in the mortgage principal (same as previously).

Recording Mortgage Payments

Follow these two steps to record mortgage payments.

Step 1

To record the mortgage payment, write a check to record the full payment. Charge to account 901 (MORTGAGE PAYMENT). Donations or transfers for the mortgage are also deposited in this account.

Step 2

To record the reduction of the mortgage payment and the addition of the accrued interest from your SURF statement:

1. Go to Accounting and select “Make General Journal Entry”.
2. Under memo type “payment and interest applied to mortgage”.
3. Leave button filled for deposit and interest earned.
4. Select bank account as checking. Do not enter anything for income or expense (this allows $0 entry).
5. Under accounts, type "60.1 (Principal Paid)" then under income type in the payment amount. Under accounts, type in 60.2 (Interest Payable) then, under expense type in the interest amount. Under accounts, type in 900.1 (Principal Reduction) then under expense type in the payment amount. Under accounts, type in 900.2 (Interest Added) then under income type in the interest amount.