Money: Converting a Liability Account to a Loan
  
PSS ID Number: Q140233
Article last modified on 12-12-1997
 
4.00 4.00a 5.00
 
WINDOWS
 

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4.00 4.00a 5.00
WINDOWS
 kbhowto
 
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The information in this article applies to:
 
- Microsoft Money version 5.0 for Windows 95
- Microsoft Money version 4.0, 4.0a for Windows 95
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SUMMARY
=======
 
This article explains how to convert a pre-existing or imported
liability account into a Loan Account in Money, which helps automate
the loan payment process and allows the use of special Loan reports.
 
MORE INFORMATION
================
 
A loan may have originally been tracked as a liability account or it
may have been imported as a liability account. To use the automatic
loan calculation, amortization, and report features, change the loan
into a Loan account. If you want to have an accurate history of past
payments, convert the Liability account as detailed below. If you just
want to track the loan from this point forward, and are not interested
in keeping the past history in the same account, then you can create a
new Loan based upon the current principal balance.
 
Steps to Convert Your Liability Account into a Loan Account
-----------------------------------------------------------
 
1. Create a new loan for this account:
 
   a. Click Go To and click Account Manager.
 
   b. Click New Account.
 
   c. Select Loan from this list of account types, then click Next.
 
   d. Step through the New Loan Account Wizard using the following
      guidelines:
 
      - Enter the payee name you used when tracking the liability
        account.
 
      - Choose No, payments have not been made.
 
      - The due date of the first payment should be the date of the
        first transaction in the liability account.
 
      - The Opening Balance is the opening balance of the liability
        account.
 
      - Select the same interest and other fees categories used in
        the liability account, and select or create a principal
        category and subcategory (such as Housing: Mortgage
        Principal).
 
   e. Finish setting up the loan.
 
2. Update your past payments:
 
   a. In the Account Register, select the account from which the
      liability loan was paid (usually your Checking Account) by
      clicking the current account name to bring down the list
      of accounts.
 
   b. Find and select the first liability loan-payment split
      transaction.
 
      NOTE: If you have several transactions, you may want to use the
      Find command in the Tools menu.
 
   c. Click the Edit button and change the Category to Loan
      Payment. When asked about replacing the current split
      information with the default splits for the loan account
      payment, click the No button.
 
   d. Change the subcategory to the name of the loan created in Step 1
      above.
 
   e. Go into the split, by clicking the Split button, and assign
      the principal amount to the correct category and subcategory.
 
   f. Repeat steps a through e for all remaining split transactions for
      this loan.
 
   g. For any payments that are not splits (such as principal only
      payments), edit these transactions so that the category is set
      to Loan Payment and the subcategory to the name of the Loan,
      then choose the appropriate option for the payment (for example:
      Apply the entire loan payment to principal).
 
      NOTE: You may have to turn off the transaction form (by clicking
      the View bar and clearing Transaction Form) to change the
      transaction from a transfer to a loan payment.
 
3. Once all the old transactions have been changed to loan payment
   transactions, the old Liability account should contain no
   transactions and can be deleted, if desired. To delete the
   Liability account:
 
   a. Click Go To and click the Account Manager.
 
   b. Select the account and click the Delete button.
 
For more information, see your Money printed documentation or online
Help.
 
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Version           : 4.00 4.00a 5.00
Platform          : WINDOWS
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Copyright Microsoft Corporation 1997.