JE and hard money issue

@screenname 

"Property was purchased. 400,000 went out as hard money.

This has been reconciled.

CPA gave JE showing 400,000 to capital."

Just to clarify, are you saying that you already recorded and reconciled the $400K payment and assigned the payment to the property's fixed asset account?  And now, your CPA has given you a journal entry that essentially duplicates that entry but has other line items? 

I need more info to help:

1) The $400K payment that has been reconciled, was that assigned to the property's fixed asset account?  If not, what was it assigned to?

2) Can you post a screenshot of the CPA's JE or at least list the debits, credits, and amounts?

If I'm understanding this correctly, you can probably make a few changes to the accounts listed on your reconciled $400K payment to get it to match the JE. 

A million thank yous!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

"Just to clarify, are you saying that you already recorded and reconciled the $400K payment and assigned the payment to the property's fixed asset account?  And now, your CPA has given you a journal entry that essentially duplicates that entry but has other line items? "

Great summation.  Yes, that's basically what I am saying. 

"

1) The $400K payment that has been reconciled, was that assigned to the property's fixed asset account?  If not, what was it assigned to?

The money that went out as Owners Capital, equity account.  From a checking account.  Reconciled.

2) Can you post a screenshot of the CPA's JE or at least list the debits, credits, and amounts?

Attached.  It's not actually. 400,000.  I rounded for posting. 

The amount is also split between two owners.

The actual amount was 416,743.11 (split between two owners - 208,371.56 & 208,371.57).

Now that you mention it, the hard money, reconciled out of the bank account, should probably be to land and/buildings?!?!  Or...?!

Others feel free to chime in.  Thank you!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

@screenname 

The JE from the CPA looks correct.  The JE has two credits to Owner's Capital ($208,371.56 + $208,371.57 = $416,743.13).  Those credits offset the debit entry of $416,743.13 that was created when the reconciled payment went out as Owner's Capital - Owner's Capital wasn't the correct account and the JE fixes that.  It's fine to have the payment as one entry and the JE as another to tidy things up.  Were you under the impression the JE was conflicting with the reconciled payment?  

At this point, you don't need to do anything.  The payment has been reconciled, the JE has properly allocated the fixed assets, expenses, equity, and mortgage payable.

A million thank yous @Rainflurry !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Out of the office for several days and couldn't access this site

You're correct, the JE is correct.

However, the CPA did NOT know about the original entry.

I'm certain.

So the 416,743.13 is in there twice.  It should be in there once.

They did pay hard money of 416,743.13, so owners cap does need to show up.

I can re-do my original entery and/or adjust the JE as long as the accounting is correct.

So what should my original entry of 416,743.13 be allocated to?!?

OR

How do I adjust the JE

Cap 416,743.13 needs to show.

Both the original payment in the bank acct (reconciled), and the JE need to stay reconciled/in balance.

Can not thank you enough!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

@screenname 

When you say "hard money", do you just mean cash?  

I'm getting more confused with each post so I need to back up and understand the process.

Where did the $400K come from?  Did the owner's deposit that into the business bank account or ???  If ~$400K was deposited into the business bank account, what account was assigned to the deposit - Owner's Capital?    

"You're correct, the JE is correct."

The JE shows the owner's paid ~$400K personally (the credit to Owner's Capital).  However, you said that the ~$400K payment was made from the checking account and it has been reconciled.  Please clarify. 

Thank you!

It is confusing!  Sorry.  Can not thank you enough!

The ~400K was wired out of the checking out.

The funds had been in the checkiing account.

The CPA did NOT know that the ~400K was already showing and rec in the bank account. 

Therefore they included the ~400K in JE.

Clear?!

so now the ~400K is showing twice.  Should only be once.

Need bank statement and JE to both stay rec/in balance.

Can adjust either, just don't know which accounts to use.

Thank you!!!!!!!!!!!!!!!!!!!!!!!!!!!!

@screenname 

Unless the balance sheet is incorrect, you're fine.  You're making some statements that don't make sense:

"so now the ~400K is showing twice. Should only be once."

That's incorrect.  This is double-entry accounting and the payment that was incorrectly posted to Owner's Capital needs to be corrected so it needs to show up twice - it shows up on your payment (incorrect) and again when credited to Owner's Capital (correction).  

"Need bank statement and JE to both stay rec/in balance."

What makes you think they don't?  IMO, they do.  You have reconciled the bank statement and the JE corrects the error made by assigning Owner's Capital to the payment - it reclassified the ~$400K from Owner's Capital to the appropriate fixed asset/expense accounts.   

At this point, unless you can show me an error on your balance sheet or P&L, all's well.

You're a saint @Rainflurry !  Thank you so much!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

It's so confusing.

I feel when I say too much I create the confusion.

Forget what I said earlier.  

Let's start fresh.

Let's just say the original ~400k that went out of the bank account and was rec is in suspense.

JE is correct.

CPA did not know about the original ~400k

If they had known the JE would have been different.

We need to show the ~400K once as capital.  I'm certain.

What accounts should I put the ~400K that is now in suspense (in the bank account) to?!?

JE can be adjusted as long as accounting is correct.

Thank you!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

@screenname 

"We need to show the ~400K once as capital. I'm certain."

An increase of $400K?  Why?  What does this transaction have to do with Owner's Capital?  If the $400K payment was wired from the business checking account and the property is owned by the business, there's no Owner's Capital involved.  Not to be rude but do you understand what Owner's Capital (equity) is - from an accounting standpoint? 

"CPA did not know about the original ~400k"

Then why did the CPA credit (increase) Owner's Capital?  If they didn't know about the $400K payment, they would have credited (decreased) the checking account instead.

I have no idea why you think anything is wrong at this point.  When you say "We need to show the ~400K once as capital", are you saying the balance sheet should show an INCREASE of $400K in Owner's Capital?  You cannot have an increase in Owner's Capital if the $400K was paid from the checking account - IT'S ONE OR THE OTHER.      

At this point, you need to show me ON THE BALANCE SHEET where there's an error.  Otherwise, we're just going in circles.  Remember, this is double-entry accounting so if Owner's Capital is over/understated, then another account must also be under/overstated. 

You're a saint @Rainflurry 

So sorry.  I know it's crazy.

Forget what I said in previous posts.

~400k is in suspense.  It went out of the checking account and is reconciled.

The JE the CPA did is correct. 

I can adjust it.

The CPA did not know about the ~400k in suspense (I"m certain).

Their JE is correct.

What account do you think I should put the ~400k in suspense to?

I can adjust the JE.

Thank you!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

@screenname 

Are you even reading my responses?  Five questions and you didn't answer one of them. 

I think we're done here.    

I'm SO sorry @Rainflurry !!!!!!!

I SO appreciate you helping me!!!!

You're extremely knowledgable, and seem to genuienly want to help people!

Yes, I read your response.  I def did NOT mean to be disrespectful!!!

It's an extrememly busy/stressful time, I honestly don't have a spare second.  I responded quickly.  I think I may have read your response on my phone, and then actually responded when I was at a computer?!?

I think {?!?), I was just trying to start completely fresh, and only provided minimal info.  This is because I think I was creating confusion by my lengthy responses.  My intentions were pure, sorry they came across badly.

You've been SO helpful, truly my deepest apologies!

I cheered your posts, if there's anything else I can do to support you please let me know.

I wish you the best.