Example: Journal Entry Among Three Companies
This example shows the entries that the system creates when you enter a journal entry among three companies.
In this example, company 200 accrues liabilities incurred by companies 50 and 60. Accounts for these companies are cleared through the hub, company 1, as illustrated:
For the journal entries, assume that the business unit on the balance sheet matches the company number. You enter one journal entry that involves more than two accounts, but does not involve the hub company:
Document |
Company |
Account |
Description |
Debit |
Credit |
|---|---|---|---|---|---|
JE 2000 |
50 |
50.8150 |
Expenses |
300 |
Blank |
JE 2000 |
60 |
60.1800 |
Prepaid Expenses |
200 |
Blank |
JE 2000 |
200 |
200.4110 |
Accounts Payable |
Blank |
500 |
When you post the entry, the system automatically generates these intercompany entries:
Document |
Company |
Account/Sub/Type |
Description |
Debit |
Credit |
|---|---|---|---|---|---|
AE 1213 |
60 |
60.1291/00000001/A |
Intercompany Receivables/Payables |
Blank |
200 |
AE 1213 |
1 |
1.1291/00000060/A |
Intercompany Receivables/Payables |
200 |
Blank |
AE 1213 |
50 |
50.1291/00000001/A |
Intercompany Receivables/Payables |
Blank |
300 |
AE1213 |
1 |
1.1291/00000050/A |
Intercompany Receivables/Payables |
300 |
Blank |
AE 1213 |
200 |
200.1291/00000001/A |
Intercompany Receivables/Payables |
500 |
Blank |
AE 1213 |
1 |
1.1291/00000200/A |
Intercompany Receivables/Payables |
Blank |
500 |
The second, fourth, and six rows are entries to the hub (company 1) from companies 60, 50, and 200. Although the hub company (1) is not in the original journal entry, all intercompany settlements are cleared through the hub company.