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stevenamar
Level 1

Journal Entry to Record Free Credit

Hello,

 

I have a prepaid card I use at charging stations to charge my electric vehicle. I add a balance to it each month (prepaid asset) and reduce the balance from the card each time I charge (expense). When I add the balance each month, depending on how much I add I get a free % amount added to the card (ex If I add $100 i'll get $5 extra for free). What is the other side of the entry to account for the $5? So far I have:

 

DR Prepaid Charging $105

CR Credit Card $100

CR ????

3 Comments 3
Rustler
Level 15

Journal Entry to Record Free Credit

CR ???

should be 

CR Other Income

stevenamar
Level 1

Journal Entry to Record Free Credit

That is what I assumed, however is it still considered as Income (for tax purposes), even if this extra $5 can only be used to charge? 

stevenamar
Level 1

Journal Entry to Record Free Credit

That is what I assumed, however would this still be considered income (for tax purposes) even if the gain is only used for purchase of more charge? 

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