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screenname
February 12, 2025
Question

JE and hard money issue

  • February 12, 2025
  • 2 replies
  • 0 views

Hi!

 

Thanks for reading this and the help!

 

Property was purchased.  400,000 went out as hard money.

This has been reconciled.

 

CPA gave JE showing 400,000 to capital.

Same JE had many other enteries. NOT hard money. 

Only buildings and land are large amounts.

 

If I delete the 400,000 from JE, then the JE doesn't balance.

If I delete the 400,000 from bank account, then bank doesn't balance.

 

Yikes!

What do I do????!!!!

QB desktop

 

Thank you!

 

2 replies

R
RoseJillB
February 12, 2025

Hi there, @screenname.

 

I'll share insights into the Journal Entry (JE) you entered in QuickBooks Desktop (QBDT) and how it should be recorded in the application.

 

Beforehand, can you tell me what you mean by hard money? Is this amount lent to purchase the property? If so, we can set up a liability account to track the loan amount properly instead of capital. Refer to this article for complete guidelines on setting up the account to record its payments: Manually track loans in QuickBooks Desktop.

 

Also, since the transaction has already been reconciled, this explains why whenever you delete the JE, the transaction does not balance from the JE and your bank account. Instead of deleting this, I recommend creating another Journal Entry to reverse the amounts and balance your accounts. To do so, it's best to consult your financial advisor to guide you in creating a reversal journal entry to use the appropriate accounts for the transaction.

 

You can learn to use the transaction journal report for calculations, insights, and audits. This report can help you find transactions that are out of balance and spot incorrect entries in other reports.

 

Let me know if you have additional questions or require guidance to help you correct your financial data. The Community is always available to lend a hand for help. Take care!

Rainflurry
Rainflurry
February 12, 2025

@screenname 

 

"Property was purchased. 400,000 went out as hard money.

This has been reconciled.

 

CPA gave JE showing 400,000 to capital."

 

Just to clarify, are you saying that you already recorded and reconciled the $400K payment and assigned the payment to the property's fixed asset account?  And now, your CPA has given you a journal entry that essentially duplicates that entry but has other line items? 

 

I need more info to help:

1) The $400K payment that has been reconciled, was that assigned to the property's fixed asset account?  If not, what was it assigned to?

2) Can you post a screenshot of the CPA's JE or at least list the debits, credits, and amounts?

 

If I'm understanding this correctly, you can probably make a few changes to the accounts listed on your reconciled $400K payment to get it to match the JE. 

 

    S
    screennameAuthor
    February 13, 2025

    A million thank yous!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

     

    "Just to clarify, are you saying that you already recorded and reconciled the $400K payment and assigned the payment to the property's fixed asset account?  And now, your CPA has given you a journal entry that essentially duplicates that entry but has other line items? "

     

    Great summation.  Yes, that's basically what I am saying. 

    "

    1) The $400K payment that has been reconciled, was that assigned to the property's fixed asset account?  If not, what was it assigned to?

     

    The money that went out as Owners Capital, equity account.  From a checking account.  Reconciled.

     

    2) Can you post a screenshot of the CPA's JE or at least list the debits, credits, and amounts?

     

    Attached.  It's not actually. 400,000.  I rounded for posting. 

     

    The amount is also split between two owners.

     

    The actual amount was 416,743.11 (split between two owners - 208,371.56 & 208,371.57).

    Now that you mention it, the hard money, reconciled out of the bank account, should probably be to land and/buildings?!?!  Or...?!

    Others feel free to chime in.  Thank you!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

     

     

    Rainflurry
    Rainflurry
    February 13, 2025

    @screenname 

     

    The JE from the CPA looks correct.  The JE has two credits to Owner's Capital ($208,371.56 + $208,371.57 = $416,743.13).  Those credits offset the debit entry of $416,743.13 that was created when the reconciled payment went out as Owner's Capital - Owner's Capital wasn't the correct account and the JE fixes that.  It's fine to have the payment as one entry and the JE as another to tidy things up.  Were you under the impression the JE was conflicting with the reconciled payment?  

     

    At this point, you don't need to do anything.  The payment has been reconciled, the JE has properly allocated the fixed assets, expenses, equity, and mortgage payable.

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