Tracking liabilities is a separate process from making the payment. The most common liability (and usually the only one) to track is the church mortgage. Because tracking liabilities is a multi-step process, many churches choose not to track their mortgage in Jewel, but to simply present the mortgage statement to the board periodically. But if you wish to track your mortgage in Jewel, here are the steps. You will need to carefully follow the instructions each and every month.
Please follow the instructions listed below for all payments, interest, etc. related to the church loan. Feel free to adjust names and numbers to fit your system and situation.
Go to Maintenance / Edit Accounts, and add the following accounts to Jewel. All three should be Type "Liability (Mortgage or Other Loan)":
- 9601 - Mortgage Loan Balance
- 9602 - Mortgage Contra Account
- 9602.1 - Mortgage Interest Paid
Structuring the accounts this way and entering payments as described below means that:
- Mortgage Loan Balance equals the current amount owed on the loan
- Mortgage Interest Paid equals the total amount of interest paid on the loan
- Mortgage Contra Account serves to make the Total Liabilities equal $0
- Total Bank Accounts equals Total Local Funds, giving a true picture of the cash available for spending
- Go to Accounting / Make General Journal Entry
- Memo: Initial Mortgage Draw or Additional Mortgage Draw
- Leave the circle filled for "Deposit and Interest Earned"
- Record the money as Income to the bank account in which the funds were deposited
- Record the money as Income into the local church account from which you have paid or will pay expenses related to the loan (i.e. Building Fund/Roof/etc)
- Record the same amount again as Income into 9601 Mortgage Loan Balance
- Record the amount once more as an Expense to 9602 Mortgage Contra Account
- The amounts in the previous two lines should cancel each other out, so the transaction balances
- Click OK to record the transaction
If you are starting to record an already-received mortgage, then substitute the current balance of the mortgage in the above instructions, and adjust the memo accordingly.
¶ Monthly Payment and Liability Tracking
Generally, you will only need one of the below options each month. Follow the instructions carefully to keep your bank and liability account balances accurate.
¶ Record a Payment of Principal and Interest
- Go to Write Checks
- Fill in the check details (Check Number or Electronic Payment, Date, Payee, Amount) as expected for the mortgage payment
- Memo: Mortgage Activity for (month/year)
- In the stub portion of the check record:
- Building Fund - Amount is the full payment amount (substitute whichever account you are using for loan repayment and donations toward the loan)
- 9601 Mortgage Loan Balance - Amount is the principal paid (Subtract the full payment minus the interest from the statement)
- 9602 Mortgage Contra Account - Amount is the negative of the full payment amount
- 9602.1 Mortgage Interest Paid - Amount is the interest added on the statement
- The Running Total on the stub should now equal the check total
- Click OK to save the check
Step 4a above is the actual mortgage payment. Steps b-d are the liability tracking. When you're done, the bank account balance should be reduced by the full mortgage payment, the Mortgage Loan Balance should be reduced by the amount of principal paid (full payment less interest) and should match the statement balance, and the Mortgage Interest Paid should be reduced by the amount of interest paid (so the balance is a bigger negative number than it was before the payment).
Same as above, but leave out the interest lines.
- Go to Write Checks
- Fill in the check details (Date, Number or Electronic Payment, Payee, Amount) as expected for the mortgage payment
- Memo: Extra Principal payment (or other pertinent memo)
- In the stub portion of the check record:
- Building Fund - Amount is the full payment amount (substitute whichever account you are using for loan repayment and donations toward the loan)
- 9601 Mortgage Loan Balance - Amount is the full payment amount
- 9602 Mortgage Contra Account - Amount is the negative of the full payment amount
- The Running Total on the stub should now equal the check total
- Click OK to save the check
Step a above is the actual mortgage payment. Steps b and c are the liability tracking. When you're done, the bank account balance and Mortgage Loan Balance should both be reduced by the principal payment and should match the statement balance.
Same as the Payment of Principal and Interest, but leave out the Mortgage Loan Balance lines, since you're not paying down any Principal.
- Go to Write Checks
- Fill in the check details (Date, Number or Electronic Payment, Payee, Amount) as expected for the mortgage payment
- Memo: Mortgage Activity for (month/year)
- In the stub portion of the check record:
- Building Fund - Amount is the full payment amount (substitute whichever account you are using for loan repayment and donations toward the loan)
- 9602 Mortgage Contra Account - Amount is the negative of the full payment amount
- 9602.1 Mortgage Interest Paid - Amount is the payment amount
- The Running Total on the stub should now equal the check total
- Click OK to save the check
Step a above is the actual mortgage payment. Steps b and c are the liability tracking. When you're done, the bank account balance should be reduced by the amount of the interest payment, the Mortgage Interest Paid should be reduced by the amount of interest paid (so it has a larger negative balance than it did before the payment), and the Mortgage Loan Balance should not be affected.
- Go to Accounting / Make General Journal Entry
- Memo: Mortgage Interest for (month/year)
- Choose Checks Written and Bank Fees
- Leave Bank Account and amount blank
- Record the interest as Income to 9601 Mortgage Loan Balance
- Record the interest as an Expense to 9602 Mortgage Contra Account
- Click OK to save the transaction
This will create a $0 transaction on your bank reconciliation that you will simply check off each month and will not affect your bank account balance. The Mortgage Loan Balance should be increased by the amount of interest accrued, and should match the statement balance.
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