HQ applies commission payable to me towards debt I owe them

SianW · ‎December 05, 2018

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

Rustler · ‎December 06, 2018

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

Rustler · ‎December 06, 2018

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.

SianW · ‎December 06, 2018

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

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HQ applies commission payable to me towards debt I owe them