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Apply Prepaid deposit

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Last year my client prepaid a deposit for a hotel event that took place last week. We put the payment in an asset account -Deferred hotel fees. To move it this year to the expense account, I created a GJE credit Deferred asset acct and debit the Hotel expense account. This corrected the balance sheet but now the hotel expense is increasing the expense account and I need it to reduce it. How do I apply this as a payment towards the final hotel bill?

QuickBooks Online

RainflurryAnswer

@parksbarbie

In this case, IMO, the easiest way is to use a journal entry: debit Accounts Payable, credit Deferred Hotel Fees. Select the hotel under 'Name' on the journal entry. You now have a credit that can be applied to the hotel bill.

Rustler

GJE does not work well in QB, and often the GJE is not included in reporting, best to not use them.

Create a service item called pre-paid deposit and link it to the deferred hotel fee asset account.

When you enter the bill for the stay, use the pre-paid item, qty is negative one, and the amount you pre-paid, the will will recalculate to the amount due, the pre-paid asset account will zero out.

P

parksbarbieAuthor

If I add this to the bill it does not ask for service item- hotel bill that we owe is entered as category, description, amount, customer, class. Would I enter the defered category and -$xxx to zero out the deferred account and subtract our downpayment from the bill?

RainflurryAnswer

@parksbarbie

In this case, IMO, the easiest way is to use a journal entry: debit Accounts Payable, credit Deferred Hotel Fees. Select the hotel under 'Name' on the journal entry. You now have a credit that can be applied to the hotel bill.

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