Basic bookkeeping account entries for a house purchase and mortgage?

Question

I borrow 200,000 to purchase a house worth 250,000, putting down 50,000 of my own. The borrowing is at 5% over 30 years.

What are the basic double-entry bookkeeping entries I must make to record this fact?

Answer 1

I would do something like below.
To record the loan, downpayment, and purchase of home:

House                        200,000  
Land                          50,000            
     Cash                                   50,000
     Mortgage Loan                         200,000

I split the building and land in case you need to depreciate the building since land does not get depreciated. There is nothing else you need to record until your first payment. You can split this into separate journal entries if you prefer. If you have other fees, you would either expense them or capitalize them so it is part of the House account. This would depend on your accounting standard you want to follow, but generally it is capitalized.

To record interest expense and loan payment on date of first payment:

Mortgage interest expense      500  
Mortgage Loan                   50
     Cash                               550

I didn't calculate what your interest would actually be. It would probably follow an amortization schedule. Note that even if your overall payment is the same every period, the interest expense and mortgage loan amount will be different.