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geedubya55
geedubya55, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 358
Experience:  17 years experience in business and individual taxation specializing in small business and farming
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what is the journal entry to record the rent reimbursement

Customer Question

what is the journal entry to record the rent reimbursement to employee in an s-corp. I want to use the accountable reimbursement plan but want to know what entries to make in the company books
Submitted: 2 years ago.
Category: Tax
Expert:  geedubya55 replied 2 years ago.

Thank you for using Just Answer.

The preferred journal entry would be a debit to Rent Expense and a credit to Cash. Office expense is usually used for office supplies. I would not recommend home office expense because for tax purposes it could be somewhat of a red flag.

Customer: replied 2 years ago.
Can it be
Dr Rent
Cr Loans from officers

Dr Loans from officers
Cr Cash

Or through expense report?
Expert:  geedubya55 replied 2 years ago.

Yes, if the corp doesn't have the cash at the time, you could record it to the officer loan and then when the corp gets the cash, pay it against the officer loan. It accomplishes the same thing but that way it is a two step process.

 

I'm not sure what you are asking about the expense report. Expense reports are usually used to reimburse an employee for actual expenses incurred in behalf of the company, not to accrue rents owed.

Customer: replied 2 years ago.
I wasn't accruing rent. I work at my rental house and calculated percentage of use and i want to reimburse myself (an employee) for rent. I was told to use accountable reimbursement plan. I will reimburse myself for the the direct and indirect home office reimbursements. I have rent, utilities and so on which will not flow through my 1040 as an income. I am not billing my s-corp rent. I just need to know the accounting entries. I searched all over and got the same answer to use accountable reimbursement plan per publication 587
Expert:  geedubya55 replied 2 years ago.
Okay. I misunderstood the question because I do have clients who own their home and rent office space to their corporation. That being said, the journal entry is still the same. If you are reimbursing rent, it is a debit to rent expense and credit to cash. If you are reimbursing utilities, it is a debit to utilities expense and a credit to cash.
geedubya55, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 358
Experience: 17 years experience in business and individual taxation specializing in small business and farming
geedubya55 and other Tax Specialists are ready to help you
Customer: replied 2 years ago.
Thank you so much!!!!
Expert:  geedubya55 replied 2 years ago.
You are very welcome.

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