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Level 1

HQ applies commission payable to me towards debt I owe them

Hi,

I have a master franchise business,  HQ holds a note I owe for $100,000.  Each time one of my sub-franchisees makes a sale they pay commission to HQ, and HQ owes me 10% of the sale amount as a bonus.

Say in February my 10% bonus is $6,000.  If I didn't have a note with HQ I would invoice them for $6,000 and it would show as income.  Instead they reduce my note, so in this case it's now $94,000.

I want to show the $6,000 in income in Quickbooks even though I don't actually see it.  I have a loan payable account for the note.  I could journal $6,000 from the loan payable account to owner equity account but I want the $6,000 to show on my income statement (as it really is income).

Can anyone help me with this?  I would be hugely grateful.

Sian

Solved
Best answer 12-06-2018

Accepted Solutions
Level 15

Re: HQ applies commission payable to me towards debt I owe them

you should have a service item for commissions earned that posts to an income account

create a service item called loan paydown or something and link it to the loan liability account

create a sales receipt
line one:  Commission earned item, qty =1, amount = 6,000.00
line two: loan paydown item, qty = -1 (negative one), amount = 6,000.00
save

nothing in this transaction directly affects equity, transactions rarely do.

View solution in original post

2 Comments
Level 15

Re: HQ applies commission payable to me towards debt I owe them

you should have a service item for commissions earned that posts to an income account

create a service item called loan paydown or something and link it to the loan liability account

create a sales receipt
line one:  Commission earned item, qty =1, amount = 6,000.00
line two: loan paydown item, qty = -1 (negative one), amount = 6,000.00
save

nothing in this transaction directly affects equity, transactions rarely do.

View solution in original post

Level 1

Re: HQ applies commission payable to me towards debt I owe them

Thank you!  I tried what you suggested and it works perfectly.

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