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One of our members rented equipment and doesn't want reimbursement. Without his donation, we would have had to pay this expense. How do we record this transaction?

 
3 Comments
Established Community Backer ***

Re: One of our members rented equipment and doesn't want reimbursement. Without his donation, we would have had to pay this expense. How do we record this transaction?

it is a two entry situation

deposit the amount of the rental in a cash type bank account and use donation income as the source account for the deposit

then spend the *cash* from the cash account to record the expense (rental)

Established Community Backer ***

Re: One of our members rented equipment and doesn't want reimbursement. Without his donation, we would have had to pay this expense. How do we record this transaction?

What kind of member? Member of an LLC? It is equity contribution to their account. And then deduct the expense.

 

A non profit? An association? You record the value received same as if we're cash. However in my view you did not spend any money even though you could have. I do not think you get an expense deduction when you did not spend anything

Established Community Backer ***

Re: One of our members rented equipment and doesn't want reimbursement. Without his donation, we would have had to pay this expense. How do we record this transaction?


@john-pero wrote: However in my view you did not spend any money even though you could have. I do not think you get an expense deduction when you did not spend anything

It's a paper trail the way I did it, no actual money is spent

recognize donation income
spend the income

it is a wash on the books

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