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Gerri A Harrison CFP EA
Gerri A Harrison CFP EA, Financial Advisor
Category: Finance
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Experience:  Over 10 years working with clients in the areas of personal finances and financial education.
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journal entry for the non-deductible expense

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I'm looking for a journal entry for the non-deductible portion of "meals & entertainment" expense.

Normally they are not split out on the financial statements since the total amount of the meals is entered into the tax return and then the deductible portion is calculated.


If you want to reflect it on your financial statements - normally non-deductible expenses would be listed as "Other Expenses". So you would have your net income then other income and other expenses.


The general journal entry depends on what you have entered to this point. If you are reporting the payment it would be:

debit Non-Deductible Meals & Entertainment (an other expense acct)

credit Cash, Credit Card, Checking account

(depending on how the meal was paid for)


If you already posted to the total to the deductible meals and entertainment account, the general journal entry would be:

debit Non-Deductible Meals & Entertainment

credit Meals & Entertainment (the deductible acct)


Hope this helps. If you need additional information, hit the need info button and ask. If you are satisfied with the answer, hit the green accept button to close out the question and allow me to receive payment.

Customer: replied 6 years ago.

I should have mentioned that it is a partnership I am working on.


Is the entry the same? If so, am I correct in thinking that this non-deductible M&E gets

closed out to retained earnings, and ultimately becomes part of the partners equity?

The journal entry would be the same. And the net income including the "other income" and "other expenses" does to closed out to retained earnings and becomes part of the partner's equity so you are correct.
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