I have received a family loan (no interest or penalties, just a friendly loan) from my parents which is deposited into my savings account for my bank. I'm having issues understanding how I should document this loan in gnucash. I understand that I can put the amount in there as a liability and it will be deducted off my net worth (which is accurate since it's a loan), however am I also supposed to make another account to represent the fact that the loan exists in my savings account?
In other words, should I make a separate account under my Savings Account with the loan amount so that my savings account in gnucash represents the actual amount in my bank's savings account? I feel like it's strange to have two accounts representing one loan which is why I'm seeking assistance to make sure I'm understanding this correctly.
To provide further clarification, I would like to be able to document the following situation in Gnucash:
I have the loan sitting in my savings account. A major event happens and I have to use $1,000 of that loan to cover it (which is the reason it's there). Now I need to still be able to track that the initial loan was $3,500, $1,000 of it has been used, and the amount left of the original loan is now $2,500.
With two accounts I would do the following: Create a liability account to exemplify the initial loan account and create a sub-savings account that exemplify's the loan in my savings account. After those accounts are created make a transaction for the loan amount that goes from the liability account into the sub-savings account. Now I can move money around from my sub-savings account and be able to track how much of the original loan I have used by subtracting the value of the liability account from the current amount in the sub-savings account (I.E Savings account has $3,500 in it; move $1,000 out of it to cover an expense; savings account now has $2,500 and the above scenario is met).
The question is, is this the correct way to do it from the double-entry viewpoint?