USA FF&E reserve Journal

[Daniel78]

Hello

What is the proper accounting treatment of FF&E reserve.

For instance, per contractual agreement, the business had to reserve 3% for FF&E. I debt the FF&E reserve expense account, and credit the FF&E accrued liability account. Next month I transfer the reserve cash, and here I credit the Cash account and debit what?

And once every quarter I request and receive funds back from lender for FF&E expenses that were recorded as short term asset. How do I record this funds recieved from lender?

Thank You

 

[kirby]

Hi. You are doing this under terms of an agreement that you need to fully understand as it relates to this reserve. Once you find someone to explain it to you, the accounting may become clear or you can re-post here. But it starts with you getting a clear understanding.