Accounting for promotional credits received as a gift card

Just_Lurking

Hello everyone - I would appreciate it if someone could validate my thinking on how to treat the following situation:

1. I bought a phone (for business use) earlier this year. It was financed at 0%.
2. Thanks to a couple of amazing promotions related to purchasing this phone and then switching carriers, I got the full cost of this phone effectively refunded in the form of two gift cards.
3. I used the gift cards to pay off the financing, but due to a delay receiving one of the gift cards, I had to make a couple of monthly device payments first.
4. The two monthly device payments were included as part of my mobile phone bill, which was auto-imported into Wave.

I realize that I can't simply expense the full mobile phone bill, as it includes a device payment that was refunded to me in the form of a gift card. Can I simply split the mobile phone transaction, and categorize the device payment as an Owner Draw?

My thinking is that since the gift card went into my (personal) pocket, the fact that my business made two payments on this device is equivalent to me taking the same amount of money out of the business.

Does my thinking make sense? Thanks!

Alexia

Hi, @Just_Lurking.

I can think of a few ways to handle it. Your suggestion seems fine at first glance. You could also handle those credits as their own Asset account and pay your phone bills out of those. Anything that you would keep for yourself after the fact would be handled as Owner's Drawings.

If you were be refunded for those early payments, you could just categorize those refunds as "Refund for an expense".