An Intercompany Journal Entry to transfer Expenses from one Subsidiary to another Subsidiary

Intercompany allocation schedules transfer a balance from one source subsidiary account to multiple destination subsidiaries for costs that are shared between subsidiaries. Below are the steps to successfully transfer expenses from one Subsidiary to another:

1. Navigate to Lists > Accounting > Accounts > New
    
2. Create new Intercompany Accounts Receivable
   1. Name: Intercompany Accounts Receivable
   1. Type: Other Current Asset
   1. Eliminate Intercompany Transactions: T
   1. Subsidiaries: parent company (include children)
   1. Include Children: T
       
3. Create new Intercompany Accounts Payable
    
   1. Name: Intercompany Accounts Payable
   1. Type: Other Current Liability
   1. Eliminate Intercompany Transactions: T
   1. Subsidiaries:  parent company (include children)
   1. Include Children: T
      1. Note: Account types Other Current Asset and Other Current Liability will not require a name on the Intercompany Journal Entry.
          
4. Navigate to Transactions > Financial > Make Intercompany Journal Entries
    
5. Set Subsidiary: Subsidiary 1
    
6. Set To Subsidiary: Subsidiary 2
    
7. Enter the below line entries:
    
   1. Note: Click Add after entering an amount in the Debit/Credit columns.
       
      1. Subsidiary: Subsidiary 1             
      1. Account: Intercompany Accounts Receivable 
      1. Debit: 1,000  
      1. Subsidiary: Subsidiary 1   
      1. Account: Professional Fees      
      1. Credit: 1,000
      1. Subsidiary: Subsidiary 2
      1. Account: Professional Fees  
      1. Debit: 1,000
      1. Subsidiary: Subsidiary 2
      1. Account: Intercompany Accounts Payable 
      1. Credit: 1,000
          
8. Click Save