Setting up liability for chattel mortgage

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We bought three pieces of equipment under finance in previous financial years. I am starting with reckon one from this financial year.
How do I create the liability for the loan?
I understand how to allocate the capital and the interest, I'm just unsure of how to create/record the remaining liability of the chattel as of 1st July 2018
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Claire Skipper

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Posted 2 weeks ago

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Sladjana MD

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Hi Claire,
You can setup New Current Liability accounts as Chattel Mortgage 1, 2, 3 Then you record your total liability of Chattel Mortgage as Cost+Finance Charges from the contract 1,2,3 that you have. You can post repayments from the bank as repayments to the Chattel Mortgage account 1,2,3 and interest account 1,2,3 accordingly. Hope this helps.
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Claire Skipper

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Yes that helps! So could you tell me how to record that total. I'm struggling with the actual knowing what to press in reckon to make the liability have a balance, if that makes sense??
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Tanya Briggs, Accredited Partner

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Set up a Liability Account Chattel Mortgage One
Subaccounts to this new account:
1.Chattel Mortgage Liability
2.Interest
Enter a Journal dated the day the finance is drawn down:
Cr 1. Chattel Mortgage liability (the amount being the total repayments to be made)
Dr Asset account for the amount being financed (which would be the cost of the equipment)
Dr 2. Interest (the amount being the difference between the total repayments and the amount financed)