I have a question about how to categorize a transaction and I hope someone can tell me how to proceed. Here is the background:
* I was paying on 2 Notes last year. Let’s call them B & C.
* I was paying the notes out of the proceeds of another Note that I was receiving. Let’s call it A.
So the proceeds from A were going to pay B & C each month; any proceeds left over stayed in my bank account and is considered income.
* The Note I was receiving, A, was paid off in March.
* Due to negotiations, I paid off Note B. This transaction was easily and successfully categorized in QuickBooks Online(QBO).
* HOWEVER, Note C was paid off by a third person. (Actually, it was the person paying Note A but I don’t think that matters in the QBO context.)
* Because "I" didn’t pay off Note C but Note C was on my books, I had a “dangling transaction’. (That’s what I called it… “dangling transaction” where by I have a payment going out but there was not money coming in to offset it. Please tell me the appropriate name for a transaction like this.)
* I need to make the account for Note C to be $0.00 because it no longer exists and is no longer a note I am responsible to pay.
I ended up offsetting the “dangling transaction” with "Retain Earnings" because I didn't know where else to attribute it to. Is this acceptable? Is there a better account to attribute the offset amount to?
Rob
