Advanced and Deferred Payments Bookkeeping Question

Advanced and Deferred Payments

Advanced and Deferred Payments

Which T-accounts are affected when a client pays rents in advance?


Which accounting statement is affected is affected by this transaction- P$L or Balance sheet?

Comments for Advanced and Deferred Payments Bookkeeping Question

Average Rating starstarstarstarstar

Click here to add your own comments

Jun 11, 2018
Rating
starstarstarstarstar
Advanced Payments Bookkeeping Question
by: Stephanie

Hello,

Thank you for your question.

Prepaid rent is a prepaid expense which is a current asset account.

The T accounts affected when a client pays rent in advance are:

DEBIT Prepaid Rent
CREDT Cash

The financial statement affected by this transaction is the Balance Sheet as cash and prepaid rent are both asset accounts.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Billing a Client For an Expense That You Rec'd Payment For

by Britt Crowell
(Savannah, GA)

I am keeping books for a property management company. We bill our other properties for labor (repair and maintenance) preformed by our contractors. However when I am billing them for the supplies that the contractors bill us for should I post it has an expense? Even though we are receiving payments for these expenses?

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Bond Payments

by Sonja
(Pretoria, South Africa)

Payment

Payment

Do I capture a bond payment against Buildings @ cost or do I capture it as a expense?

Regards,
Sonja

Comments for Bond Payments

Average Rating starstarstarstarstar

Click here to add your own comments

Jul 18, 2023
Rating
starstarstarstarstar
Recording Bond Payments
by: BB

When recording a bond payment, the specific account to use depends on the nature and purpose of the bond.

If the bond represents a long-term liability, such as a bond issued to finance the construction or acquisition of buildings, the payment would generally be recorded against the liability account related to the bond, not as an expense.

This reflects the repayment of the principal amount of the bond. The interest portion of the bond payment, however, would be recorded as an expense over time as it represents the cost of borrowing.

Here's a typical journal entry for a bond payment:

Debit (increase) the Bond Payable (or similar liability account) for the principal portion of the payment.

Debit (increase) the Interest Expense account for the interest portion of the payment.

Credit (decrease) the Cash account for the total bond payment amount.

By recording the bond payment against the liability account, you maintain an accurate representation of the bond's outstanding balance and fulfill your repayment obligations.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Bonus Payment

by Larry Cox
(Tampa Florida)

Can I give cash bonuses to hourly employees and then issue a 1099 for the amount received?

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Booking Paid Canadian Provincial Tax

by Keith
(Alabama)

I have a vendor in Canada that has charged me provincial tax. I am a re-seller and have not charged or booked this tax back to my customer yet. I'm wondering if the correct way to deal with this is to create a separate invoice that reflects a "processing or handling fee" to recoup the dollars I paid and did not bill back yet?

I, of course, would not charge tax on this bill to my customer. I have the same situation with a service provider who billed Canadian provincial tax. Any help with an answer or a possible source for an answer will be much appreciated.

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

CC payments

by James Waite
(Flint, Michigan)

Hi, I foolishly used my business CC for "non business" purchases as well as business purchases. How do I determine what portion of my monthly payment qualifies as a business expense?

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Credit Card Payment Date Paid

by Barbara
(Island Lake, IL USA)

What is the correct date to use when paying with a credit card as it pertains to paid expenses and items? Is the item "paid" when the credit card is charged by the vendor or when your company actually pays the credit card bill. Which "month" would the expense be in?
I'm using QB PRO.

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Entering Customer Payment With Deduction For Money We Owe Them

by Rita
(US)

I have a customer who is also a vendor. When they make a payment as customer and deduct the amount we owe them as vendor (customer is vendor also), How do I post it?

Both the customer and vendor invoices have to be affected and also the general ledger accounts but not the bank account. In the past I credited one of the invoices but this throws off the income statement.

It cannot affect the total sales or the total purchases because these are legitimate so i cannot credit one or the other.

Can you help me? I have been dealing with this for a long time and cannot seem to get an answer.

Thank you.

Comments for Entering Customer Payment With Deduction For Money We Owe Them

Average Rating starstarstarstarstar

Click here to add your own comments

Jul 22, 2011
Rating
starstarstarstarstar
Response to Anonymous July 19th
by: Rita

Thank you for your response. The A/P and A/R can be journaled but this will still leave the invoices as opened or unpaid. How can I affect the A/P and A/R, show the invoices as paid also, but not affect the income statement or checkbook balance???? so confusing:)

Jul 19, 2011
Rating
starstarstarstar
Customer Who Is Also Vendor
by: Anonymous

I believe you just need to set them up as both a customer and a vendor. Then when you receive payment from them as a customer and they deducted the amount you owed them as vendor you will simply debit the vendor A/P account and credit the Customer Accounts Receivable account. Thus bipassing the sales, purchases or income accounts that would have already been effected through the original invoice transactions.


Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

From Chapter Bill of Exchange

by Rahul
(Mumbai, Maharashtra, India)

Manish accepted a bill of Rs.40,000 drawn by Krishna at 3 months.
Krishna got the bill discounted with his bank for Rs.39,000.
Before the due date, Manish approached Krishna for renewal of the bill.
It was agreed to pay Rs.30,000 immediately together with interest on the remaining amount at 10% p.a for 3 months and for the balance Manish accepted a new bill for 3 months. These arrangements were carried through.
But afterwards Manish became insolvent. Only 35% of the amount could be recovered from his estate.

1)Pass necessary Journal Entries in the books of Manish

2)Prepare Manish's A/c in the books of Krishna

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

How to Enter Income Tax Remittance Payments

by Henk
(Canada)

Taxes

Taxes

If I'm not mistaken, some sites tell you to set up a so called 'Contra' account for this purpose. Yet, when creating this 'Contra' asset account, the amount is still reflected as part of your total Assets, even though they have been paid out.

Other sites have indicated to set these quarterly remittances to the government in the Expenses area. To me, this is incorrect as these payments are NOT expenses, which are deducted from income to yield income tax payable.

For now, I have entered these payments under Owners Withdrawals, in Liabilities.
Please let me know of the proper way to enter these remittances.

Comments for How to Enter Income Tax Remittance Payments

Average Rating starstarstar

Click here to add your own comments

May 18, 2011
Rating
starstarstar
Income Tax Payments
by: Anonymous

I've actually always put my self employed quarterly tax payments unders Owners Draw Tax Liability myself, so I think you may be fine to leave it where you have it also.


Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Invoices Presented For Payment Over 5 Years Old

I have received an invoice dated 2010 for services rendered in 2006 - 2010. Is there a bookkeeping standard for how long a vendor can wait to invoice the client?

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Insurance Claims Payment Data Entry

by Sebastian
(Virginia)

Where do I enter insurance claims payments into the company books?

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Law Suit Settlemnet Payment

by Ayhan
(FL)

Which COA can we use for a payment made for a law suit settlement?

Thanks.

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Line of Credit Repayment

I am paying on my line of credit, and want to know what I would characterize payment on the principal as in my ledger?

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Managing Vendor discounts

Hi
I am wondering what is the correct way to manage discounts I get from Vendors. They are flat rate discounts which vary from product to product.

I can't journal the discounts into an expense account as I do with customers, so what is the correct way to deal with this please.
Thanks in advance for any help...
Cheers
Ric


Hello Ric,

Thank you for your inquiry.

Typically the vendor discounts are entered when invoiced. So, you would simply input the vendor invoice into your accounts payable with the discount terms included. Then the discount would automatically be recorded when paying within the discounted period.

Comments for Managing Vendor discounts

Average Rating starstarstarstarstar

Click here to add your own comments

Dec 15, 2009
Rating
starstarstarstarstar
Here is Your Entry
by: Anonymous

Sale = 100.00 (CR)

Receive Cash 90.00 (DR)
Discount 10.00 (DR)

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Over/Under Billing

by Jackie
(Houston, TX)

How do you book over/under billing for WIP on Profit and Loss.

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Payable To Expense

by Linda Wagner
(Brownsburg, IN, USA)

When I book income, I will credit my sales and sales tax payable and debit cash. How do I pay the tax liability and recognize that expense?

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Paying an Invoice

Should original invoice from a service provider be included with payment or is a copy okay?

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Paying Business Expenses with personal Credit Card

I started a business before I had a business checking account and purchased gasoline for my truck using my
personal checking account. I am using the actual method instead of the mileage method for tax purposes.

Is it correct to debit gasoline expense and credit
owners contribution( an equity account)for this transaction?

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Paying Estimated Taxes

As a freelancer, do I wait to receive a 1099 before making quarterly payments to the IRS? Also, do I include personal income tax payment with business or should I file that separately? I used an EIN for my self employment stint.

Thank you


Hi,

Thank you for your question.

You do not need to wait for a 1099 in order to start making quarterly tax payments to the IRS. You can estimate how much you think you will make on your 1099 and pay estimated quarterlies based on that.

Your personal income tax and self-employment tax will be totalled together on your Federal 1040, so you can include your personal income tax payment with business. Estimate all of your income together to base your quarterly payments off of.

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Payment For Good Received By Company

by William
(South Carolina)

My sister payed for tools bought for my company with her own money. i payed her back by withdrawing a 100 dollars from my checking account. how would account for this in the books.

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Proper Recording of Payment To Company

I work for a contractor. The owner, outside of the business, also provides services unrelated to our company, to a certain customer.

Usually, this customer pays the owner for his personal work with a check made out to the owner personally, which is ideal.

However, this time, the customer submitted a check paid to the order of the company for their outstanding invoice AND the amount that was owed personally to the owner.

I recorded the amount of the deposit that was due to the the company as I normally would. But what do I record the balance of the deposit to that was due to the owner?

Should that money be recorded in our GL Liability account called: Due to Owner?

If not, then what type of GL account should I record this money to? And then, how should I record it in a journal entry to balance it?

And then when I cut a check to the owner for the amount that is due to him, do I code the payment from the company as GL Liability: Due To Owner as well?

Thank you!

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Property Tax Payment

by ZULEICA
(KISSIMMEE FL )

How do I pay the taxes of my condo by internet?

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Stop Payment

by Krishnendu
(West Bengal)

What is the journal entry should be made for stop payment of a cheque by order of bank?

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Underpayment Penalty

A taxpayer may owe an underpayment penalty for what?

Hi,

Thanks for your question,

A taxpayer may owe an underpayment penalty when he/she is showing a balance due on his/her tax return at the end of the year.

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Vendor Invoiced But Now Does Not Want Payment And Checks Have Been Created

by Kim
(Tempe AZ)

We are a listing agent for REO properties. We manage the cost of upkeeping the home till it sells and the cost we incur is reimbursed from the asset company. Our maintance guy inv'd us and does not want payment from us. He clams he found Jesus. How do account for the checks and the money that was reimbursed to us?

TB

Comments for Vendor Invoiced But Now Does Not Want Payment And Checks Have Been Created

Average Rating starstarstarstar

Click here to add your own comments

Apr 08, 2011
Rating
starstarstarstar
Reversing Entry
by: Stephanie

Hello,

I believe you should be able to reverse the original entry. So when you wrote the check to him you would have debited A/P and credited Bank as follows:

DEBIT A/P
CREDIT BANK

Therefore, you would post the refunds as:

DEBIT BANK
CREDIT A/P


Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Vendor Payments - New Business

by Angela
(Atlanta, GA )

A few of our invoices were paid by individuals as a loan. They did not put the funds into our bank account but sent the payments directly to the vendor. The payables are on each vendor account. How do I credit the payment to the particular vendor although we didn't pay them ourselves. We did reimburse the individuals from our checking account.

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.

Where To Post Unemployment Insurance Payments To Texas Work Force Commission

by Suman Thomas
(Houstonq)

Where to post Unemployment insurance payments, does it go to payroll expense?

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.


Please subscribe to my monthly newsletter, Bookkeeping Basics E-zine. It tells you every month about the new information that I have added, including some great tips and advice from myself and other Bookkeeping Basics readers.

Enter Your E-mail Address
Enter Your First Name (optional)
Then

Don't worry — your e-mail address is totally secure.
I promise to use it only to send you Bookkeeping Basics E-Zine.

Like Bookkeeping-Basics.net?