Transaction without real money

[Mihai Rosu]

I'm not an accountant either.

I think you may be right.  It's one of those trickier situations...

Here is my revision.

For transaction.  You did not yet receive money:

Dec 1:            Accounts Receivable               40
                                    Rental Revenue                       40

For money you owe to owner at the creation of agreement:

Dec 1:            Lease Expense                       20
                                     Accounts Payable                 20


For money received:

Dec 30:         Cash                                       40
                                     Accounts Receivable             40

For money paid out:

Dec 30:          Accounts Payable                   20
                                     Cash
 20


This look better?




On Mon, Dec 17, 2012 at 12:24 PM, Maf. King <maf at chilwell.net> wrote:

> On Mon 17 December 12 09:57:14 Mihai Rosu wrote:
> > From accounting principles point of view, this is how the transactions
> > should be recorded:
>
> Hi,
>
> I'm not an accountant, but I'm not sure that you are completely correct
> about
> accounting principles (at least, for UK practice and regulations)
>
> On Dec1, an agreement is made that the contractor will pay money on the
> 30th
> December.  That sounds like accrual accounting to me.
>
> I think that you should make an invoice on Dec 1 for the rent (and post it
> in
> the GC business features A/R)
>
> When the contractor pays the money, then you process payment as described
> in
> the docs.
>
> The money due can be tracked easily using the ageing report.
>
> I'd do the same thing for the bills due to the owner, but they would be
> Vendor
> bills to an AP account.
>
>
> just my 0.02
> Maf.
>
>
> >
> > *On Dec 1 you make a contract with Contractor A for room.  There are no
> > journal entries because you did not receive anything (money) and you did
> > not give anything yet (1 month's worth of rent).  *
> >
> > No journal entries.  But you must make paper proof of your agreement of
> > room and payment.
> >
> > *On Dec 30:  You receive $40 from contractor.  You owe owner of room $20.
> >  This is your expense.  I will call it Lease Expense, since that is what
> it
> > sounds like what you have.*
> > *
> > *
> > Dec 30:    Cash                                  40
> >                        Rental Revenue                    40
> >
> > Dec 30:    Lease Expense                   20
> >                        Cash                                   20
> >
> > You must create a Vendor for the owner of room.
> > You must also create a Customer for the contractor that will pay you for
> > the room.
> >
> > On Mon, Dec 17, 2012 at 8:41 AM, tassman <tassman at gmail.com> wrote:
> > > Oh... cant find words in english...
> > >
> > > Hmmm... This transaction for example was done in 1st December. I want
> to
> > > note this because money will be given to me on 30st December.
> > >
> > >
>
>