USA Credit Card Refund

[Yegorich]

There was a duplicate charge on our corporate card in May 2018.
The charge was paid through our AP system. Then the vendor refunded us for the amount in July.
I am trying to figure out the JE for this transaction.

Here what I think the Journal Entries should be :

To record initial charge debit Expense and Credit AP
To pay off the charge Debit AP and Credit Cash
When we get the refund in July, the credit balance was reduced by the refund amount. How would you record that?
Credit Expense and Debit AP? Please advise.

 

[bklynboy]

Credit Expense Yes and Debit AP as I assume AP records Credit AP and Debit Cash, Think of it as what would the right entry be if there was no refund and use the journals to wipe out all the noise to get back to that original entry. Since Initial entry was Debit expense Credit cash (ignore AP intermediary account which nets to 0). You need to wipe out the double expense (hence the Credit) and Debit Cash (for funds received)

 

[Yegorich]

Credit Expense Yes and Debit AP as I assume AP records Credit AP and Debit Cash, Think of it as what would the right entry be if there was no refund and use the journals to wipe out all the noise to get back to that original entry. Since Initial entry was Debit expense Credit cash (ignore AP intermediary account which nets to 0). You need to wipe out the double expense (hence the Credit) and Debit Cash (for funds received)

It makes sense. Thanks a lot!