I'm not sure what the journal entry would be to account for cashback rewards at the end of a period that is being put towards the overall credit card payment. In other words, It's time to pay the business credit card. the balance is $2000.00 and we have accumulated $1000 in cash back rewards. How do I record the $1000 and subsequent redemption. Thank you in advance!!!!
If you prefer, you can record it to an expense account so that it doesn't show as a separate income line on your P&L. Either way, your net income will increase by $1,000. No way around that.
Enter a credit card credit and assign an Other Income account to it. That's the same as making a journal entry that debits your credit card liability account and credits the Other Income account. You now have $1,000 credit that reduces your cc balance and a corresponding amount to Other Income.
If you prefer, you can record it to an expense account so that it doesn't show as a separate income line on your P&L. Either way, your net income will increase by $1,000. No way around that.
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