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Level 2

Sharing rent on warehouse space

I share the rent on my warehouse with an investor. We are both on the lease but my company pays the rent and my investor wire transfers his part to my bank account monthly and sometimes prepaid a couple months. How do I handle this without overstating income or my rent expense?

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Best answer March 26, 2020

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Level 15

Sharing rent on warehouse space

Pay your rent using rent expense just as you would if you are alone in this

 

When the deposit hits, set the source account to an income account you create called rent share income or something like that

 

If they send more than one months rent, split the deposit between rent share income and a liability account called pre-paid rent.  Monthly do a journal entry, debit pre-apid rent and credit rent share income for the amount of that months rent

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2 Comments
Highlighted
Level 15

Sharing rent on warehouse space

Pay your rent using rent expense just as you would if you are alone in this

 

When the deposit hits, set the source account to an income account you create called rent share income or something like that

 

If they send more than one months rent, split the deposit between rent share income and a liability account called pre-paid rent.  Monthly do a journal entry, debit pre-apid rent and credit rent share income for the amount of that months rent

View solution in original post

Highlighted
Level 2

Sharing rent on warehouse space

Thank you so much Brother. You are a life saver & I appreciate you invaluable knowledge.

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