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talk2khurram
Level 3

Sharing Rent Journal Entry

Hi

 

My company total rent is 4750. I am paying to renal company 4750. But my actual rent expense is 4000 and 750 i am receiving from another company (RS International). 

 

Rent(Dr.)  4000

        (Dr.)  750 --> I want to know what will be name and account type or it will be treated as customer                                            or vendor. 

Bank(Cr.)  4750

 

Thanks and Regards,

1 Comment
john-pero
Community Champion

Sharing Rent Journal Entry

It may depend on if the other company has a lease in hand for 750 and you are just acting as a mediary or are you subletting part of the space. 

 

If the latter then your expense is 4750 and income is 750. In this case you provide lessor with 1099 for 4750x12.

 

If the former you record 4000 as rent expense and 750 as a current liability which you reduce as you pay. In this situation you need to make certain the third company issues their 1099 to the lesdor and not you for their 750x12.

 

Do not use journal entries for any of this. Use deposit to record the 750 received and use a check with two lines  rent and liability for the payment.

 

I mentioned 1099 Rent because for business to business it is required unlike residential tenants do not issue any annual paperwork to their landlords

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