A 1031 exchange is a new asset, the old asset capital gain is rolled up into the new asset - it is not a sub account.
Create the new asset and sub account for depreciation if applicable
debit the old asset depreciation account, credit the old asset account for the balance in the depreciation account
debit the new asset account, credit the old asset account for the balance in the old asset account
create the loan liability account and debit the asset and credit the liability account for the amount borrowed.
do not enter interest as part of the loan unless it is added to the amount borrowed on the loan documents, use the bottom line on the loan documents.
Each 1031 exchange is a unique transaction, meaning new accounts. Keep the paperwork cause you will need it at tax time.
