I need to bill a client for a retainer of 50,000. Additionally, we owe them rent of 5,000. What are the journal entries to record the issuing of the invoice and what are the journal entries to record the payment of the invoice (they are only going to be paying me $45,000). I am billing them at the beginning of the month, they are going to pay at the end of the month.
thank you.
"lohad" wrote
Sounds like a Credit of the retainer amount to either to a liability or to income account depending on if it's considered "earned" at that moment. The corresponding debit is to a receivables account.
Then Debit rent expense and credit the payables account for that amount.
When the money comes in, Credit the receivables account for the full amount and Debit the payables amount for that full amount, with the remaining amount booked to the bank.
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