Hi Tad ,

Thanks for reaching out. To correctly post your lender fee (loan origination fee) for a mortgage, the approach you've taken by creating a loan liability account and an asset account, and then making a journal entry, is a good start. Since the loan origination fee is amortized over the life of the loan and wasn't paid upfront, it's crucial to treat this fee as a deferred expense.

You should create an "Other Current Asset" account for the loan origination fee if you plan to amortize it within a year, or an "Other Asset" account if it will be amortized over more than a year. As you amortize the fee, you'll make periodic entries to debit an expense account related to loan fees and credit the loan origination fee asset account, reducing its balance over time in accordance with the amortization schedule.

It's also important to ensure that the overall cost reflected in your books accurately represents the cost of the property and the loan together. The journal entry crediting the liability and debiting the asset should include the actual loan amount received. The origination fee account will then be amortized separately as described.

Please make sure to consult with a financial advisor or accountant to ensure that these entries are made correctly according to the financial reporting standards applicable to your situation.

Warm Regards,
Erzsi

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Hi Erzsi, 

Thank you for the reply. That really help clear things up. 

Just one more question, in my version of sage cloud accounting there is no "Other Asset" category. Only Assets, Fixed Assets and Future Assets. Do I use the Assets or Future Assets category? 

Thanks! 

Tad