PIK Interest Booking Challenge

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Jasel17212

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Mar 4, 2023, 4:28:36 PM3/4/23
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I'm looking for some input on how to book the following.

Let's say I've loaned someone $1,000. Each month I receive PIK interest on that note in the amount of $10.00. I make an entry as follows:

2023/01/01 * Note 1 PIK Interest
        Income:Interest:PIK Interest    -10.00 USD
        Assets:Notes:Note 1


Even though I haven't received this money as cash, I choose to include this PIK interest in my tithes calculation:

 = /^Income/
         (Liabilities:Tithe)           0.10  


When the note eventually pays off, my CPA needs to know that all of this PIK interest has now been fully realized. I could back the accumulated PIK interest out of the "Income:Interest:PIK Interest" account and put it into an "Income:Interest:PIK Interest Realized" account, but this messes up my automatic tithes calculation. My other thought is to add the realized interest to a virtual "Income:Interest:PIK Interest Realized" account, but now my income reports are off unless I remember to exclude one of the two income accounts depending on whether or not I want a cash basis view or accrual view of my income.

Anyone have thoughts on a good way to handle this?

Thanks
JL

Brandon Olivares

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Mar 4, 2023, 5:50:45 PM3/4/23
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You’ve already recognized the income, so the realized income shouldn’t go in Income at all. Why not just a credit to Assets:Notes:Note 1 and debit to Assets:Cash or whatever your cash account is?

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Jasel17212

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Mar 5, 2023, 3:43:03 PM3/5/23
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Thanks Brandon
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