Stephen, I could be wrong, but I bet when you get the 1099 for the CD both the interest and principal penalties will be combined in the penalty box. Technically, the penalty is defined as simple interest for x days (depending on the term of the CD). I would bet the interest earned on the CD will also be the total interest, including that which was accrued and listed as the interest penalty. If that is the case, it would be more accurate to show the total penalty so you can match it to the 1099. This is the 1st year I have cashed CD early, because of the rapid change in rates, so I will find out which way is better myself.
Thank You, Gyle McCollam Gyle McCollam gmccol...@live.com<mailto:gmccol...@gyleshomes.com> email ________________________________ From: Stephen <rilesthemtobeli...@gmail.com> Sent: Sunday, January 15, 2023 5:54 PM To: Murugan Muruganandam <m.muruganan...@hotmail.com>; Gyle McCollam <gmccol...@live.com>; gnucash-user@gnucash.org <gnucash-user@gnucash.org> Subject: Re: [GNC] Certificate of Deposit Early Withdrawal Penalty Account Entry Interest is accounted for as income per CD account. The way I ended up doing it allows me to see how much interest I have earned by each and all accounts and the interest penalty and principal penalties are noted as to which account they were applicable but I do not track the penalties account by account (because the penalty is for closing the account -- a one time event). On 1/15/2023 2:59 PM, Murugan Muruganandam wrote: stephen one inquisitive question. did you receive any interest on the CD at all earlier and if so how did you account it Saludos Cordiales Murugan ________________________________ From: gnucash-user <gnucash-user-bounces+m.muruganandam=hotmail....@gnucash.org><mailto:gnucash-user-bounces+m.muruganandam=hotmail....@gnucash.org> on behalf of Stephen <rilesthemtobeli...@gmail.com><mailto:rilesthemtobeli...@gmail.com> Sent: Sunday, January 15, 2023 5:38 PM To: Gyle McCollam <gmccol...@live.com><mailto:gmccol...@live.com>; gnucash-user@gnucash.org<mailto:gnucash-user@gnucash.org> <gnucash-user@gnucash.org><mailto:gnucash-user@gnucash.org> Subject: Re: [GNC] Certificate of Deposit Early Withdrawal Penalty Account Entry Thanks to you and Murugan I got this sorted. As usual, over-thought and over-wrought. Although I'm sure I could show all the changes in one split entry it was easiest for me to credit the interest 162.89 as one standalone entry first. Then I could see my way clearly to showing the two penalty sub-amounts totaling 1529.51. Intuitively I fairly certain I could have shown the interest earned among the splits all as one entry but I'm going to quit while I'm ahead. I just didn't want to lose the detail of the separate penalty amounts nor their total. Again, many thanks. On 1/15/2023 11:23 AM, Gyle McCollam wrote: > I would enter this Murugan suggested. Let's say the balance of the CD > prior to closing on your books was $300,000.00 > Using the amounts you have given: > Debit Credit > Asset: Acct moved to $298,633.38 (Closing Balance) > Income: CD Interest $162.89 > Exp: Bank: Penalties $1529.51 > Asset: CD $300,000.00 (Balance just prior > to this entry) > > Thank You, > > *Gyle McCollam* > > Gyle McCollam > > gmccol...@live.com<mailto:gmccol...@live.com> > <mailto:gmccol...@gyleshomes.com>email > > ------------------------------------------------------------------------ > *From:* gnucash-user > <gnucash-user-bounces+gylemc=gmail....@gnucash.org><mailto:gnucash-user-bounces+gylemc=gmail....@gnucash.org> > on behalf of > Murugan Muruganandam > <m.muruganan...@hotmail.com><mailto:m.muruganan...@hotmail.com> > *Sent:* Sunday, January 15, 2023 11:17 AM > *To:* Stephen > <rilesthemtobeli...@gmail.com><mailto:rilesthemtobeli...@gmail.com>; > gnucash-user@gnucash.org<mailto:gnucash-user@gnucash.org> > <gnucash-user@gnucash.org><mailto:gnucash-user@gnucash.org> > *Subject:* Re: [GNC] Certificate of Deposit Early Withdrawal Penalty > Account Entry > hi Stephen > > The entries can be input as follows. I could not understand where you > are getting orphans or imbalances if you can explain it would be easy > > Account Dr Cr Notes > Principal Asst: Bank Account Asst: CD Account $ > Principal amount > Interest Asst: Bank Account Income: CD Interest > Interest earned + partial month $162.89 > Penalty Interest Exp: Bank: Penalties Income: CD > Interest Total penalty $1.529,51 > > > > > > Saludos Cordiales > > > Murugan > > ________________________________ > From: gnucash-user > <gnucash-user-bounces+m.muruganandam=hotmail....@gnucash.org><mailto:gnucash-user-bounces+m.muruganandam=hotmail....@gnucash.org> > on > behalf of Stephen > <rilesthemtobeli...@gmail.com><mailto:rilesthemtobeli...@gmail.com> > Sent: Sunday, January 15, 2023 4:30 AM > To: gnucash-user@gnucash.org<mailto:gnucash-user@gnucash.org> > <gnucash-user@gnucash.org><mailto:gnucash-user@gnucash.org> > Cc: gnucash-user@gnucash.org<mailto:gnucash-user@gnucash.org> > <gnucash-user@gnucash.org><mailto:gnucash-user@gnucash.org> > Subject: [GNC] Certificate of Deposit Early Withdrawal Penalty Account > Entry > > I had a CD that I closed before it matured. The bank applied a penalty > of 90 days interest at the CD rate. In fact the total penalty was > figured as the sum of principal penalty of $1,366.62 and penalty amount > paid from interest earned for the period of a partial month of $162.89 > for a total penalty of $1,529.51. The statement clearly shows a payment > of +$162.89 and a penalty of -$162.89 and a penalty amount from > principal of the $1,366.62. The interest earned and penalized is a net > $0 so I could just book the $1,366.62 as a charge to the CD account and > as as an charge to an early withdrawal penalty account to obtain the > closing balance on the account. But it seems to me that I should be > booking at least 3 splits to show the interest earned account and > interest earned penalized account and the rest of the penalty as a > charge to the CD account but the numbers produce orphans or imbalances. > I'm treating all entries as income items so interest earned, interest > penalized, and a principal penalty. They are multiple entries and not > multiple splits in the CD income account. Is this the correct way to > book this? Some guidance would be appreciated. Thanks in advance. > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org<mailto:gnucash-user@gnucash.org> > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org<mailto:gnucash-user@gnucash.org> > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org<mailto:gnucash-user@gnucash.org> To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. 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