USA Intercompany - Rental Question


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Hello,

Can anyone tell me what the entries would be in this scenario?

My company owns 33% of a property and is looking to rent one of the offices. Currently, we collect all rent (rental income) from the tenants and then distribute the 66% to the other two owners (rent expense).

Now we are looking to rent one of the empty spaces but the space is for one of our subsidiary companies and the other owners would like to see their 66% of the rental income.

Thanks for the help!
 
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Steve-LevelUp

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Essentially, treat it as an expense from the subsidary company and revenue as normal for the landlord, which is treated as normal. There would need to be a offset entry on consolidation so that revenues are not overstated, but it's not too difficult. The simple thing to do is to not over think it. If the market rate is $3,000 a month, then you just need to pay the other two their 66% portion ($2,000 a month)
 

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