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Community Explorer **

Tracking Accrued Revenue Behind the Scenes in Cash Basis

Situation: 5 different companies, three of them under the umbrella of two parent companies. Some of them share office building, owe rent to a parent company, etc.


All companies report on cash basis for tax purposes.


Here's my question: What is the best way for us to track unpaid rent? Monthly rent is not always paid; however, we still want to keep track of it because it will eventually be paid. The only journal entry I know to record accrued rent is to

         DR Accrued Rent (current asset account)

         CR Rent Income (income account)

which makes rent income inaccurate for cash basis. 


Should each company just have open rent invoices / bills instead of specific loan / asset account?   One company currently has unpaid rent invoices for several years totaling over $1 million, and it seems like that should be moved to long term liability, since it is basically a loan from the parent company.  If it should be moved to liability, what would be the JE for both lessee and lessor?


Thanks in advance


1 Comment
Established Community Backer ***

Re: Tracking Accrued Revenue Behind the Scenes in Cash Basis

JEs are posted in both cash and accrual reports in QBO, unlike QBD where you have some control based on which entry is on the first line. So I don't see a way to be able to run both cash and accrual based reports if you use JEs