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1. Add an asset account for your new car.
2. Enter the first transaction with the category as Adjustment for the opening balance. In the Increase field, enter the current value of your car, that is $30,000.
3. Create a loan/liability account for the actual loan amount borrowed.
4. Enter the first transaction with the category as Adjustment for the opening balance. In the Increase field, enter the actual loan amount.

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1. Go to the account from which you are repaying the loan, usually a checking account.
2. Add a new transaction with the category as Adjustment for the opening balance. In the Amount field, enter the total amount paid as the first installment (principal plus interest). For the above example, assume you paid $360.
3. Add splits. Enter the first split transaction as a transfer of the principal amount to the loan account. Enter the second split transaction as the interest amount paid. Ensure that the total of the principal and interest amount in the splits equals the amount mentioned in the transaction.
4. Go to the liability account you created for your car. You will see that the principal amount transferred is applied and your total loan amount is reduced.

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We recommend that you go to your asset account regularly and adjust the value of your asset depending on whether the value has increased or decreased. This is important to help you have a clear picture of your total net worth.

Related topics

• FAQs for managing loans
• Adding asset and liability accounts