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My company is providing a new service where creative design agencies use our account to purchase advertising services from different multimedia exchanges that they cannot access on their own. I am looking for a little guidance on how to setup the journal entries. The way these transactions are setup is that at the end of the month, all of the ad services purchased by the agencies are billed to my company by the exchange and concurrently we send out an invoice to agency for these fees plus our transaction/interest fee. I am thinking the two part entry would be:
For invoice from my company to the agencies
Dr - AR for amount billed to my company by the exchange plus our fees
Cr - AP for amount billed by the exchange
Cr - Transactions Fees Revenue
Our payment to the exchange will Cr Cash & Dr the AP created from above entry and when we receive payment from the agency it will Dr Cash & Cr the AR.
Is this right?
For invoice from my company to the agencies
Dr - AR for amount billed to my company by the exchange plus our fees
Cr - AP for amount billed by the exchange
Cr - Transactions Fees Revenue
Our payment to the exchange will Cr Cash & Dr the AP created from above entry and when we receive payment from the agency it will Dr Cash & Cr the AR.
Is this right?
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