Journal Entries and Property Management Statemens

Owners are contributing along with rental payments? Are these owners in the respect that they are buying the apartment or are they actual partners in the business?

You say you have owners depositing money, and at the same time say these are expenses paid out of an operating account. confusing.

Your journal entry should track gross rental income less expenses, is that what you meant to say?

@Mary C 

"I entered an entire year of statements before entering the bank statements."

That's what the issue is. I would first reconcile those two up-front, and enter transactions at the same time. And the difference between the Property Management Statement and the bank statement should be brought up with the Owner. It's possible to true-up difference may end-up using the Equity account.

I hope this helps!

Hi Rustler - Thank you for your response.  The "owners" are buying the property and also partners in the business (married couple).   The property management company collects the rents and then pays and tracks most of the monthly expenses.  There were some capital investments for renovations so the owners were contributing funds directly to the PM to cover the construction work.  

In a separate bank account, the owners also contribute money and pay the mortgage and other expenses that the PM does not manage.  

Does that make better sense?  Thanks again.

Mary

Got it!!  Thank you so much!  

Mary

As a property management company, the incoming rent payments come in from the tenant and are being entered as Income: Rental, but not yet given to the property owner. When given to the owner, they are putting it as an Owner Distribution account.   The issue is that if booked to Owner Distribution, that doesn't reduce the Rental Income account. How do you handle the two transactions?  Since the income of the rent isn't distributed right away, shouldn't it be on the balance sheet as other assets? Then when the payment is distributed to the Owner of the property, the only part that goes in the Owner Distribution is what is actually given to the owner when there are deductions from that income, but the Rental account would then need a JE to reduce the full amount take out of that account, is that correct?  The books were set up incorrectly and I have no way to reconcile the funds because the rental is showing under Income: Rental Income.  What do I need to do to correct all the entries so that the Rental Income gets fully reduced when the distribution to the owner is made either in full or less expenses paid?