Tenant charges for expenses incurred.

JonH

Hello, I'm still quite new to bookkeeping and would like some help understanding how to code/categorize deposits and withdrawals for expenses we as landlords incurred as a result of tenant damage that we ultimately charged back to the customer. For instance, a tenant's dog destroys a couple doors, floors, and blinds. The cost to repair all damages is $500. We as the landlords pay the $500 to repair the damages and we invoice/receive $500 from the tenant. How do we accurately code the money received for the damages and the money paid for repairs? In my mind, this doesn't seem to fit into any of our Income/Expense COA categories.

JonH

Ok, I discovered how journal entries work which is how this problem is solved, at least in my case. Now when we have tenant chargeback situations, I’ll delete the imported income bank transactions and create a new journal entry in their place crediting my bank account and debiting the expense account. I leave the original expense transactions in place. This properly shows that we didn’t earn income nor did we have a normal maintenance expense, but merely paid ourselves back for maintenance costs incurred by tenant damage.

JonH

I apologize, I flip-flopped the credit debit part. I meant to say; I debit my checking account and credit the expense account.

ConnorM

Hey @JonH! Thanks for reaching out here, and for keeping this thread updated with regards to how you'd found a solution! Definitely appreciate that! Please feel free to reach out here if there's anything else that you'd like some clarity on in the future!

hotbread

We used this link to address reimbursements due FROM tenants.

https://support.waveapps.com/hc/en-us/articles/115000588103-Claim-reimbursable-expenses-on-an-invoice