USA How to record customer settlement expense

[HereIGo]

1) customer had major defaults with product and had to redo with other product...we agreed to pay them 15k...how is this recorded?

2) customer will invoice for the 15k agreement and GM thinks he can split the expense over a few months. What is the GAAP I can show to explain this isn't possible?

 

[Steve-LevelUp]

I don't know the specific number, but the matching principle prevents you from spreading this over several months. You cannot smooth out the expense. As for how to record the $15k invoice, I will presume that this is a material amount of money (otherwise smoothing wouldn't be an issue) so I would look at the GL structure and see what account is most fitting. If nothing is fitting, consider creating a new account for this expense.