Prepayment (More than actual paid)


We have a prepayment subscription service, for example:
Pay 1000 and get 1100 credit.
From account point of view, I only get 1000 cash, and already recorded it in accounts receivable as prepayment, how do I record the extra 100 value into the same customer account since I havent get any cash for the 100 prepayment.


1st line of your receipt should be 1100 in your customer prepayments (unearned revenue)

Your second line is 100 as discount (or a prepaid expense if you want better matching).

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But that would mean the customer would only have 1000 in record, when the customer can actually spend up to 1100 in store. Can I record the 100 to the customer as bonus credits when there isn’t any cash involved?

Your customer would have 1100

You could set up you customer as a Liability account, or rather a subaccount, with 1100 in the account.

As the customer draws or spends then the sales are recorded against the liability subaccount

Presumably the 100 bonus is recorded as an expense straightaway whereas the sales are recorded as they are made.

Is the money refundable to the customer?

No its not refundable

So, it can be recorded as income as soon as it is received.