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Apologies if this is duplicate post. Don't think my original one went through just now.
Here is my scenario:
Landlord agrees to pay for landscaping. Tenant hires Gardener. Gardener hands invoice to Tenant.
Tenant, who should have referred invoice to Landlord, pays it himself instead (bad Tenant, bad Tenant!)
How do I handle QB entries for this?
I can enter Gardener invoice so I can track Gardener for 1099.
I can cut check to Tenant to reimburse him.
But this leaves Gardner invoice unpaid on books. How do I address this?
There is several ways to do this, I prefer
Create, if you do not have one, an expense account in the chart of account called clearing
pay the tenant using the clearing account as the expense (reason) for the payment
enter the gardener bill, use the expense account for landscaping expense
on the next line select the clearing expense account and enter the same amount as a negative number
save the zero dollar transaction
Thanks, Rustler, for replying. I'm afraid I don't understand. What is the difference between using a "clearing" account and a checking account?
If I have this:
Acct Pay Checking Account
Gardener Invoice 100.00 Gardening
Tenant Reimb 100.00 Gardening
How do I clear the Acct Pay?