I bought a pair of eyeglasses for $5 from a friend. I only paid to him $4 however as I didn't have enough cash then, so that means I owe him $1. Today I paid off the remaining $1.

How should I record this into GnuCash?


  • It is a debt, you owe money. – Andy Nov 25 '18 at 2:34
  • What accounts are you using? I would assume something like Assets:Cash, Expenses:Eyeglasses, and Liabilities:Debt. In the first transaction, you decrease cash by $4, increase your eyeglasses expenses by $5, and increase your debt by $1. In the second transaction, you decrease your cash by $1, which pays off the $1 debt left by the first transaction. – chepner Nov 26 '18 at 22:00

This should have been two transactions:

  • the first involved spending $4, having a debt of $5 and gaining an asset worth $5.
  • the second involved spending $1 to lowering the amount you owed by $1
  • An example of which accounts are modified by each transaction would be useful. – chepner Nov 26 '18 at 21:56

Here's an example of a minimal account hierarchy that would be involved:

  • Assets
    • Cash
  • Liabilities
    • Money owed to Friend
  • Expenses
    • Eyeglasses

You could, of course, tweak the specifics as desired.

Then, for your initial transaction of purchasing the eyeglasses, you have one transaction with three splits:

Account                           Debit     Credit
================================= ========= ========
Expenses:Eyeglasses                  $5.00
Assets:Cash                                   $4.00
Liabilities:Money owed to Friend              $1.00

That is to say, you pay for the glasses by transferring $4 of cash and $1 of adding a liability. The liability account goes up to having a balance of $1.

When you pay back the liability, that's a transfer from your cash back to the liability, bringing the liability's balance back to $0 since you don't owe money anymore:

Account                           Debit     Credit
================================= ========= ========
Assets:Cash                                   $1.00
Liabilities:Money owed to Friend     $1.00

While that the "formal" way to represent it, in practice for a case like this I might not actually bother with making a separate liability account for owing a friend a small amount of money. That is, I might just track a $4 expense on one day and a $1 expense on the next day, and not track that I actually did incur a debt in there. It depends on the details of how and why you want to track your personal expenses.

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