Mortgage Record Keeping

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.

Setting Up a Loan in Jewel

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.

Create Accounts

Go to Maintenance / Edit Accounts, and add the following accounts to Jewel:

1. 9601 - Mortgage Loan Balance - Type is "Liability (Mortgage or Other Loan)"
2. 9602 - Mortgage Contra Account - Type is "Local Fund"
3. 9602.1 - Mortgage Interest Paid - Type is "Local Fund", sub account of 9602 - Mortgage Contra Account

Receive the Loan Funds

1. Go to Accounting / Make General Journal Entry
2. Memo: Initial Mortgage Draw or Additional Mortgage Draw
3. Leave the circle filled for "Deposit and Interest Earned"
4. Record the money as Income to the bank account in which the funds were deposited
5. 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)
6. Record the same amount again as Income into 9601 Mortgage Loan Balance
7. Record the amount once more as an Expense to 9602 Mortgage Contra Account
8. The amounts in the previous two lines should cancel each other out, so the transaction balances
9. 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

1. Go to Write Checks
2. Fill in the check details (Check Number or Electronic Payment, Date, Payee, Amount) as expected for the mortgage payment
3. Memo: Mortgage Activity for (month/year)
4. In the stub portion of the check record:

   1. Building Fund - Amount is the full payment amount (substitute whichever account you are using for loan repayment and donations toward the loan)
   2. 9601 Mortgage Loan Balance - Amount is the negative of the interest added on the statement (so $157 interest gets entered as -157)
   3. 9602 Mortgage Contra Account - Amount is the negative of the full payment amount
   4. 9602.1 Mortgage Interest Paid - Amount is the interest added on the statement
   5. 9601 Mortgage Loan Balance - Amount is the full payment

5. The Running Total on the stub should now equal the check total
6. Click OK to save the check

Step a above is the actual mortgage payment. Steps b-e 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 it has a larger negative balance than it did before the payment).

Note: When you save the check, Jewel will combine steps b and e into one line. So when you look back at the check or see it in reports, you will see just one line for 9601 Mortgage Loan Balance, with the amount of the Principal paid. If you prefer, you can combine those two steps when you enter the transaction.

Record a Principal-Only Payment

Same as above, but leave out the interest lines.

1. Go to Write Checks
2. Fill in the check details (Date, Number or Electronic Payment, Payee, Amount) as expected for the mortgage payment
3. Memo: Extra Principal payment (or other pertinent memo)
4. In the stub portion of the check record:

   1. Building Fund - Amount is the full payment amount (substitute whichever account you are using for loan repayment and donations toward the loan)
   2. 9602 Mortgage Contra Account - Amount is the negative of the full payment amount (if your payment is $500, record -500 here)
   3. 9601 Mortgage Loan Balance - Amount is the full payment

5. The Running Total on the stub should now equal the check total
6. 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.

Record an Interest-Only Payment

Same as the Payment of Principal and Interest, but leave out the Mortgage Loan Balance lines, since you're not paying down any Principal.

1. Go to Write Checks
2. Fill in the check details (Date, Number or Electronic Payment, Payee, Amount) as expected for the mortgage payment
3. Memo: Mortgage Activity for (month/year)
4. In the stub portion of the check record:

   1. Building Fund - Amount is the payment amount (substitute whichever account you are using for loan repayment and donations toward the loan)
   2. 9602 Mortgage Contra Account - Amount is the negative of the payment amount (if your payment is $500, record -500 here)
   3. 9602.1 Mortgage Interest Paid - Amount is payment amount

5. The Running Total on the stub should now equal the check total
6. 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.

Record Accrued Interest Without Making a Payment

1. Go to Accounting / Make General Journal Entry
2. Memo: Mortgage Interest for (month/year)
3. Choose Checks Written and Bank Fees
4. Leave Bank Account and amount blank
5. Record the interest as Income to 9601 Mortgage Loan Balance
6. Record the interest as an Expense to 9602 Mortgage Contra Account
7. 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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