In double entry accounting, how do I enter a loan?

Question

I have taken an accounting course several years ago, but I'm a little rusty. I'm using GnuCash, double entry accounting software. I have a loan from a friend, so no interest. I have paid about half the loan off and have spent all the money from the loan years ago. However, now I have decided to start using GnuCash to track my finances. How do I enter this loan? I'm confused as to which accounts to enter this in, since I have no assets from the loan, they have all been spent. As of now I only have the liability. So where does the other entry go?

Answer 1

You do have some good knowledge still.

The other side of the loan entry (the debit) would be in you cash account (or cash book).

Whatever you have spent the money on would be credits to the cash account and debits to the relevant account head.

Hope this helps.

I'm available to take you on a refresher tutoring perhaps you need one.