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Hello,
I'd like to know if my inter-company journal entries for recording an expense paid on behalf of a wholly owned subsidiary is correct. Note, that the sub has it's own set of books. Let's say the parent company is paying rent for their subsidiary company by transferring cash to the subsidiary to pay it. My entries are as follows:
Parent
Dr Intercompany expense
Cr Intercompany Payable
Dr Intercompany payable
Cr Cash
Subsidiary
Dr Intercompany Receivable
Cr Intercompany Revenue
Dr Cash
Cr Intercompany Receivable
Subsidiary makes payment for it's rent
Dr Expense
Cr Cash
Intercompany elimination in consolidation on parent’s books, something like this?
Dr Intercompany rev
Cr Inercompany exp
Eliminate the inter-company entries and are left with the rent expense amount in the consolidated P&L. This seems very basic to me but could not find on the web and haven't looked at inter-company transactions in ages.
I'd like to know if my inter-company journal entries for recording an expense paid on behalf of a wholly owned subsidiary is correct. Note, that the sub has it's own set of books. Let's say the parent company is paying rent for their subsidiary company by transferring cash to the subsidiary to pay it. My entries are as follows:
Parent
Dr Intercompany expense
Cr Intercompany Payable
Dr Intercompany payable
Cr Cash
Subsidiary
Dr Intercompany Receivable
Cr Intercompany Revenue
Dr Cash
Cr Intercompany Receivable
Subsidiary makes payment for it's rent
Dr Expense
Cr Cash
Intercompany elimination in consolidation on parent’s books, something like this?
Dr Intercompany rev
Cr Inercompany exp
Eliminate the inter-company entries and are left with the rent expense amount in the consolidated P&L. This seems very basic to me but could not find on the web and haven't looked at inter-company transactions in ages.