UK Transferring creditor balance from one company to another

[Balboa120]

Hi,

If I have one company that is to be closed, and a second company is to take the outstanding creditor balance on, how would this be reflected in the second company?

I would credit a 'Company 1 creditor' code, but what would the debit side be? Surely not an expense code to the P+L and it was already expense in company 1.

If anyone could help with the journal, that would be great.

Thanks

 

[Julia Satin]

When you account this transfer in the closing company, you probably do :
Dr creditors
Cr retained profit(shareholders funds)

Then in the new company this should be recorder as follows:
Dr retained profit(shareholders funds)
Cr trade creditors

Does this make sense?