I won a legal settlement in which the total amount to be paid to me will be done in instalments. Interest will accrue.
I debited the principal and interest accruals to an asset account and credited an equity account. When I receive a payment I debit a checking account for the amount paid and credit the asset account which correctly decreases the balance owed.
The equity account balance however, with interest credits, continues to grow.
Is this the correct way to set this up?