Follow this guide to correctly track a mortgage and record mortgage payments for a property in DoorLoop. There are a few ways to do this depending on what you are looking to record.
If you are looking to only record the expense of a mortgage payment, use the first method.
If you are looking to also track amortization and escrow payments, use a combination of the next two methods.
Record a Mortgage Payment (Expense)
Add an expense account called Mortgage Expense to the Chart of Accounts.
Create an Expense to the mortgage company using the newly created Mortgage Expense account.
Track a Mortgage, including Amortization and Escrow
DoorLoop already provides a Mortgage liability account, but you may want to create a new account if you plan on tracking multiple mortgages.
Add specific expense accounts to your Chart of Accounts for expenses that may be paid directly by the mortgage company from escrow.
For examples - property taxes, homeowner's insurance, etc.
Record the initial loan with a journal entry.
Credit the mortgage’s liability account for the amount of the loan.
Debit the property’s fixed asset account for the amount of the loan.
If you’ve already made some payments, balance the journal entry using the Opening Balance equity account.
For example, let's say the mortgage is for a property valued at $200,000 and the remaining principal balance is $150,000. The journal entry for this mortgage would be:
DEBIT the Property Fixed Asset account: $200,000
CREDIT the Mortgage Long Term Liability account: $150,000
CREDIT the Opening Balance Equity account: $50,000
When recording a mortgage payment, create an Expense to the bank as a payee, and use the accounts this payment is correlated to (Mortgage Interest, Mortgage liability, Mortgage Escrow).
Record a Payment from Escrow by the Mortgage Company
Use a journal entry to record a payment made from escrow by the mortgage company:
For example, let's say there was $10,000 in escrow. The mortgage company used $5,000 to pay property taxes. The general journal entry for this escrow payment would be:
DEBIT the Property tax expense account: $5,000
CREDIT the Escrow current asset account: $5,000