[GNC] One LLC pay expense of another LLC

[Michael or Penny Novack]

On 4/28/2024 12:17 PM, Fred Tydeman wrote:
> If LLC-a pays an expense of  LLC-b
> ie, cash from LLC-a goes to expense of LLC-b,
> should I also show a transfer of equity from LLC-a to LLC-b?
> It seems that needs to be done so that the Balance sheet for LLC-b is
> correct.

This is an accounting problem, not a gnucash question.

Although I am adverse to giving business accounting advice, you seem to 
be forgetting a major part of the (total) transaction.

I assume, of course, that there are separate sets of books, one for 
LLC-a and one for LLC-b << they are separate legal entities >>

  When you say LLC-a paid an expense of LLC-b don;t you really mean that 
there were TWO parts to these transactions? The first part affects only 
LLC-a's books. LLC-a is making a loan to LLC-b << that it is for an 
expense of LLC-b is irrelevant >>  So that would be creating an asset 
account "Owed by LLC-b)" and you debit that and credit cash (checking, 
or however this bill of LLC-b was paid. On LLC-b's books you need a 
liability account "owed to LLC-a" and you debit the expense and credit 
this account.

Do you see that both books remain in balance?

Michael D Novack