Recording Loan Amortization

I own a $1000 loan at 8.25% (the current prime rate) monthly, maturing in 24 months. A payment of $96.97 is made every month. How do I record this (The first payment was made today)? Do I seperate the interest and
principal? Like this:
Cash
Item Dr Cr Bal ------------------------------------------------------------------ Start 0 Equity 4000 4000 Loan 1000 3000 1st.Pay 96.97 2903.03
Equity
Item Dr Cr Bal ------------------------------------------------------ Start 0 Equity 4000 (4000)
Assets
Item Dr Cr Bal -------------------------------------------------------------------- Start 0 Loan 1000 1000
Interest Paid
Item Dr Cr Bal ------------------------------------------------------------------------ Start 0 1st.Pay 82.50 (82.50)
Principal Paid
Item Dr Cr Bal --------------------------------------------------------------- Start 0 1st.Pay 14.47 (14.47)
Is this the correct way to record this type of loan? Thanks!!!!!
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news:1cwb.googlegroups.com...

Do you mean you "owe" a loan? if you owe money the outstanding balance is on the credit side. The interest paid entries look wrong (and a very wrong calculation)
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wrote in message

and
balance
very
If this isn't a student question then your 'business' is in real trouble! If you are the lender then the loan is a debit and the interest earned is income. And 8.5% is a total year rate! Perhaps you should go back and re-read the section on notes receivable or interest earned.
.
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Steve wrote:

No, it's monthly. He agreed to this.
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wrote in message

maturing
record
interest
trouble!
is
and
Sorry, didn't know you were a loan shark. These entries are "off the books" of course.
.
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Steve wrote:

Actually, I'm learning loan accounting from my friend David Mastron. But he's not always available. This is a prob I made up.
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