Accounting Question - How to post
I have an odd situation and can't think it through:
1. I have a vendor bill for $650.00 (Credit A/P and debit Outside Services expense.
2. I took a cash advance which Debited the Bank Account (asset) and Credited Owner Draw (liability)
3. I loaned the vendor $200 as an advance in cash. (I should have entered this as Debit Owner Draw and Credit Vendor Deposits, but it's still looking like a personal draw.)
4. Because of a business issue, the vendor collected a payment from another transaction directly from our client INCLUDING our markup which the vendor acknowledged should be refunded to us: $450.00. (That $450 has not been posted as income yet.)
At this point,I created a Vendor Credit for each of the amounts: $200 and $450. This Debited A/P (a liability) and Credited Vendor Deposits (an asset). I then applied the credits to the bill. This marked the bill PAID.
The problem I have not reflected the $450 credit as income nor the $200 in any category! The entire original Bill was posted as an expense. How do I post $450 as Other Income (offset account?) and how do I show the $200 was NOT a personal draw but became a credit to the vendor?