Transaction without real money

[David Carlson]

On 12/17/2012 12:46 PM, Mihai Rosu wrote:
> 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.
>>>>
>>>>
>>
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Nor am I an accountant, but I will comment anyway.

If your real situation is not very much more complicated than your
example, then the suggestion to use paper notes such as IOU's or notes
such as Mihai Rosu suggested is the easy thing to do.  If your real
situation is more complex, the suggestion that John Ralls made to use
the business features is the better choice.

David C
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