Intercompany Transfer - Same EIN - 2 different QuickBooks
Hey everyone, I need some advice on the cleanest way to handle internal transfers.
I have two separate QuickBooks files for two different locations, but they both fall under the same EIN. One location is not operational yet, so I'm transferring funds to it to cover start-up costs. This money isn't really a "loan" the new location isn't going to "pay it back" in the traditional sense.
When I consolidate the financials, I want these to just cancel out. My original thought was to just record it as Expense in one and Income in the other, but I’m worried that will mess up my actual P&L for tax purposes since it's the same legal entity.
My current plan:
- Sending Company: Other Current Asset ("Due from Location B")
- Receiving Company: Other Current Liability ("Due to Location A")
Does this sound right for a same-EIN setup? Or should I be using Equity accounts (Distribution/Contribution) since the money won't be repaid?
Thanks for the help!