Discussion:ADJUSTED FAIR RENT
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Discussion Forum Index --> Accounting Questions --> ADJUSTED FAIR RENT
| 13 May 2008 | |
| Two clients, an LP and an LLC, have common ownership. The LLC pays rent to the LP. As of 12/31/06 there is an A/P on the books of the LLC for unpaid rent to the LP. (The LP has a receivable for the same amount.) In May 2008, the partners in the LP agree to adjust the 2006, 2007 and 2008 monthly rent amounts to lower amounts.
How should this be recorded and in what year should it be recorded? We have not completed the 2007 tax return yet. It is a cash basis tax return. We do not issue separate f/s. Should 2006 be amended? Should the cumulative adjustment for 2006 and 2007 be recorded in 2007? Or is the adjustment recorded in 2008 because that is when the agreement was signed to adjust the rents? | |
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