Journal Entry

Hi MichASR 

 

Thanks for your post. One way to handle this situation is to create loan liability accounts for each company. So in Company A create a loan liability account for Company B and in Company B create a loan liability account for Company A. Make sure the Account Type is Credit card.

 

When Company A pays a Company B expense:

1. in Company B record the expense as you normally would. If you record a Spend Money transaction change the Pay from account to the Company A loan liability account. If you record a Purchase transaction when you record the Pay bills change the Pay from account to the Company A loan liability account.
2. in Company A record a spend money transaction with the Pay from account as the bank account and allocate to the Company B loan liability account

In Company B the expense will be correctly recorded as an expense of that business without affecting the bank account. In Company A the bank account will show the payment made without affecting the P&L. The loan liability accounts also allow you to keep track of the amounts each company 'owes' the other.

 

If Company B reimburses Company A:

1. in Company B record a Transfer money transaction from the bank account to the Company A loan liability account
2. in Company A record a Transfer money transaction from the Company B loan liability to the bank account

Please let me know if you need further help.

 

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