I am not sure how to show an invoice as paid for a vendor due to the nature of payment.

Question

The company I work for had a new floor put in ($4000) and the landlord said they would pay half the cost. 
 The landlord told the company to reduce rent amount that month by $2000. I entered total rent for the month of $2500 then put in a credit to rent account of $2000 (landlords portion of paying for new floor). 
 I am not sure how to apply the $2000 rent reduction to show towards payment on landlords half on current invoice on the books. I hope this makes sense. I am stumped.

Jenn J · Answer

Hi, although I am not an expert, I have experience with working with wonky transactions such as this. 
 Since the landlord paid for &frac12; of the floor directly, I would leave the rent alone - put in the full amount of $2,500. 
 In the A/P Journal, make an invoice for the flooring for $4,000, and on a 2nd line, have -$2,000 go into your rental expense account. Make a note on the 3rd line that the landlord paid for half of the flooring directly. 
 That should leave you with a $2,000 balance on the flooring invoice, on which you can input your payment details. 
 I hope that clears things up for you! 
 
 Edit: I reread your question and I probably misunderstood. 
 Your company paid for the full cost of the floor, correct? 
 In that case, leave the flooring invoice/payment alone, but note the invoice number. 
 In the A/P Journal for your rent payment, on the 2nd line put in your -$2,000 as reimbursement for the floor to the rent expense account. 
 Put in a note referencing the invoice number for the floor (can be done on the 3rd line description box). You can also put in a signifier in your invoice number for the rent (like maybe LR for Landlord Reimbursement) or whatever you will recognize when a report is printed. 
 Sorry for the confusion. I hope this clears it up.

Marj@Swab · Answer

Morning Jenn.....you should be able to do all the entries you require between AP/Bank You will have your payable going into an expense account for the flooring for the 4000 doing it through AP and it will credit your bank account. You will have a payable for your rent of 500 that will go through your rent expenses and the bank. You will pay the full 4000 from the company through the AP System. The only deduction is your rent amount so the difference between the 2500 rent and what you are actually paying for rent of 500 is your 2000. I hope I didn't make that sound more difficult!

Sage 50 Canada

I am not sure how to show an invoice as paid for a vendor due to the nature of payment.

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