On 4/28/2024 12:17 PM, Fred Tydeman wrote:
If LLC-a pays an expense of LLC-b
ie, cash from LLC-a goes to expense of LLC-b,
should I also show a transfer of equity from LLC-a to LLC-b?
It seems that needs to be done so that the Balance sheet for LLC-b is
correct.
This is an accounting problem, not a gnucash question.
Although I am adverse to giving business accounting advice, you seem to
be forgetting a major part of the (total) transaction.
I assume, of course, that there are separate sets of books, one for
LLC-a and one for LLC-b << they are separate legal entities >>
When you say LLC-a paid an expense of LLC-b don;t you really mean that
there were TWO parts to these transactions? The first part affects only
LLC-a's books. LLC-a is making a loan to LLC-b << that it is for an
expense of LLC-b is irrelevant >> So that would be creating an asset
account "Owed by LLC-b)" and you debit that and credit cash (checking,
or however this bill of LLC-b was paid. On LLC-b's books you need a
liability account "owed to LLC-a" and you debit the expense and credit
this account.
Do you see that both books remain in balance?
Michael D Novack
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