Accounting Question

Oct 05, 2013 2 Replies

Hello,



I have an accounting question. If a Hospital is a S Corp but the Hospital building is owned by another Corporation and the Hospital is leasing it. I f the Hospital spends its cash funds for repair but gets reimbursed by the owner Corporation, how should all the entries be booked? Should the expens es be booked by the Hospital and then reversed when it gets reimbursed by t he owner Corporation? But then there is no record of expenses by the Hospi tal and the vendors (contractors) are treating the Hospital as the revenue source and not the owner Corporation. Thanks for your help.


wrote

Under GAAP you would book an asset account like Reimburseable Expenses for the expenditure. Then when the payment is received, book cash and the receivable.

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