Canada Journal entries for both buyer and seller for free services

[TERRY STEVEN]

A buyer gets $50 in free lawn cutting service. Seller does not expect payment. What are the journal entries for both buyer and seller?

 

[Kat Maple]

Hi Terry

No entry works here. You could credit "Gift Income" but what would you debit? Not an Asset, or a Liability or an Expense.
So I suggest no entry.

Thanks,

Kat

 

[Urquia]

Hi good afternoon. In some countries you have to do the entry for the VAT element and both parties must record it. When it is referred to services probably you do not need to do any entry but in the case that you are taking items from inventory you will have to do what i described in the first sentence