Re: [GNC] One LLC pay expense of another LLC
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 ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] One LLC pay expense of another LLC
Not advice but in accounting terms if LLC-b needs to raise cash it can be done either through equity finance or debt finance. LLC-b sells common stock at par (amount above par goes into Additional Paid-in Capital account) to LLC-a in exchange for cash OR LLC-a lends cash to LLC-b in the form of a note payable You are correct that the balance sheet would be adjusted to account for the new cash. Not wise to mix up the expenses of separate entities (some would call this "piercing the corporate veil"). On Sun, Apr 28, 2024 at 9:18 AM 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. > ___ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > - > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. > ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
[GNC] One LLC pay expense of another LLC
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. ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
