Real Estate Journal Entries: Examples & Reference

This reference guide details the standard transaction lifecycles in real estate investing, using double-entry bookkeeping. It serves as a knowledge hub for understanding how transactions map to the Chart of Accounts (COA) in terms of Debits and Credits.

For less common situations, see Infrequent items, including one LLC paying another LLC's expenses and funding or repayments between companies.

1. Core Principles: Debits & Credits in Real Estate

Real estate bookkeeping is governed by the accounting equation:

To adjust account balances, use the following rules:

2. Typical Chart of Accounts (GL Codes)

Real estate entities usually follow standard numerical classification bands:

• 1000–1999 (Assets)
• 1110 Bank Cash / Operating Account
• 1310.xxxx Escrow Reserves (Taxes & Insurance held by lender)
• 1500 Property, Plant & Equipment (Fixed Asset Roll-Up Header)
• 1505 Land (Non-depreciable asset)
• 1510 Building (Depreciable asset)
• 1520.FA-xxxx Building Improvements / CapEx (prefixed with FA-)
• 1530.FA-xxxx Land Improvements (Fences, paving, sidewalks)
• 1545.FA-xxxx Appliances & Carpeting
• 1550.FA-xxxx Furniture & Fixtures
• 1600 Accumulated Depreciation (Contra-Asset Roll-Up Header)
• 1610.FA-xxxx / 1620.FA-xxxx Accumulated Depreciation (Sub-accounts prefixed with FA-)
• 2000–2999 (Liabilities)
• 2100 Accounts Payable / Accrued Expenses
• 2200 Tenant Security Deposits Held
• 2400.xxxx Mortgage Loans (Principal balance)
• 2600.xxxx Accrued Mortgage Interest Payable
• 3000–3999 (Equity)
• 3100 Member Contributions
• 3200 Member Distributions
• 3300 Retained Earnings
• 4000–4999 (Revenues)
• 4010 Rental Income
• 4020 Late Fees & Other Tenant Revenues
• 4090 Utility Reimbursements (RUBS) / Other Income

<!-- COA:expense-list:START -->

• 5000–6999 (Expenses)
• 5000 Direct Goods and Services Expenses
• 5010 Repairs
• 5020 Cleaning & Maintenance
• 5030 Property Management Fees
• 5040 Real Estate Taxes
• 5050 Property Insurance
• 5060 Utilities
• 5070 HOA & Condo Association Fees
• 5080 Mortgage Interest
• 5081 Other Interest
• 5085 Discount Point Amortization
• 5090 Loan Cost Amortization
• 5100 Leasing Commissions
• 5110 Wages & Salaries
• 5120 Employer Payroll Taxes
• 5130 Employee Benefits
• 5900 Depreciation Expense
• 5910 Depreciation Expense - Buildings
• 5920 Depreciation Expense - Building Improvements
• 5930 Depreciation Expense - Land Improvements
• 5940 Depreciation Expense - Equipment
• 5945 Depreciation Expense - Appliances
• 5950 Depreciation Expense - Furniture & Fixtures
• 5960 Depreciation Expense - Vehicles
• 5970 Depreciation Expense - Leasehold Improvements
• 6000 Operating Expenses
• 6010 Advertising
• 6020 Legal & Professional Fees
• 6030 Travel
• 6031 Auto Expenses
• 6080 Meals and Entertainment
• 6040 Supplies
• 6050 Other Taxes & Licenses
• 6050.1 Other Taxes
• 6050.2 Licenses & Permits
• 6060 Bank & Payment Processing Fees
• 6070 Software & Office Expenses
• 6090 Other Rental Expenses

<!-- COA:expense-list:END -->

See the full chart and tax mappings.

3. Transaction Lifecycles & Journal Entries

A. Acquisition of Real Property

When purchasing a property, you capitalize the purchase price and closing costs, allocate values between land and building, and record the mortgage debt.

Journal Entry Example:

• Purchase Price: $500,000 (80% Building / 20% Land allocation)
• Mortgage Loan: $400,000
• Closing Costs (Capitalized): $10,005
• Cash Paid (Down payment + closing costs): $110,000

B. Rental Operations & Property Management

1. Receiving tenant security deposits

2. Monthly tenant rent receipt

3. Paying operating expenses (e.g., plumbing repair)

4. Returning security deposit (with partial withholding for damages)

• Total Deposit Held: $1,500
• Withheld for Repair/Cleaning Damages: $300
• Refund Paid to Tenant: $1,200

5. Writing off uncollectible / missed rent as a loss (Bad Debt Expense)

Scenario A: Writing Off Uncollectible Rent Balance (Accrual Basis)

• Unpaid Rent Balance Owed: $800

Scenario B: Applying Security Deposit to Cover Missed Rent

• Missed Rent Balance Owed: $800
• Security Deposit Applied: $800

C. Financing & Debt Service (Mortgage Payments)

Mortgage payments are split into three parts: Interest (expense), Principal (liability reduction), and Escrow reserves (asset).

Monthly Mortgage Payment Entry:

• Total Payment: $2,500
• Principal Portion: $500
• Interest Portion: $1,500
• Escrow Portion: $500

Mortgage Interest Accrual (Accrual Basis)

Under accrual accounting, interest expense is recognized in the period it is incurred, rather than when the cash payment is made. At month-end, the accrued interest is recorded as a liability, which is later cleared when the actual mortgage payment cash is paid.

Step 1: Accruing Interest at Month-End

• Interest Incurred: $1,500

Step 2: Mortgage Payment on Due Date

• Total Payment: $2,500
• Principal Portion: $500
• Interest Portion (Clearing Liability): $1,500
• Escrow Portion: $500

D. Fixed Assets & Depreciation

Capital Expenditures (CapEx), such as replacing a roof, are capitalized as assets and depreciated over their useful life, rather than expensed immediately.

1. Capitalizing a Property Improvement (e.g. New HVAC: $8,000)

2. Booking Monthly or Annual Depreciation

E. Refinancing

Refinancing involves paying off an old loan, establishing a new loan, and accounting for refinancing costs.

• Old Loan Paid Off: $350,000
• New Loan Established: $450,000
• Refi Closing Costs Paid: $5,000 (Capitalized over loan term)
• Net Cash Proceeds Received: $95,000

F. Disposition / Sale of Real Property

Upon selling the property, you remove the historical cost and accumulated depreciation from the books, account for transaction costs, and record the gain or loss on sale.

Sale Details:

• Sale Price: $650,000
• Original Book Cost (Building + Land): $500,000
• Accumulated Depreciation: $40,000
• Remaining Mortgage Balance: $380,000
• Selling Costs (Broker, escrow commissions): $35,000
• Net Cash Proceeds Received: $235,000
• Realized Gain Calculation:

G. Investor Capital Contributions & Distributions

LLC members inject capital to fund operations (Contributions) and pull cash out of the business from profits (Distributions).

1. Initial or Additional Partner Contribution (e.g. John Doe injects $50,000)

• Account Used: Member Contributions (3100.M1)

2. Cash Distribution to Partner (e.g. Distributing $5,000 to John Doe)

• Account Used: Member Distributions (3200.M1)

4. Master Transaction Lookup Table

Use this table as a quick reference sheet for day-to-day transactions.

5. Infrequent items

A. Inter-company transactions

One LLC pays another LLC's expense

Suppose Oak LLC owns the credit card, but a $500 repair belongs to Pine LLC's rental property. The two LLCs expect Pine to reimburse Oak.

Record the repair on Pine's books and the amount recoverable on Oak's books. Each company needs its own balanced entry:

Due from is an asset: the other company owes this LLC money. Due to is a liability: this LLC owes the other company. For an ordinary short-term reimbursement, these are current asset and current liability accounts. If the purchase is a capital asset, the benefiting LLC debits the appropriate asset account instead of Repairs. Allocate that expense or asset to the benefiting property.

When Pine later reimburses Oak's bank account:

Both intercompany balances are now zero. Oak's card payment is a separate entry: debit Credit Card Payable and credit Bank. If Pine instead pays Oak's card directly, Oak debits Credit Card Payable and credits Due from Pine LLC; Pine still debits Due to Oak LLC and credits its Bank.

The repair is recognized once, by Pine. The reimbursement clears the intercompany balance. A payment representing owner capital or a distribution requires the applicable equity treatment instead of this reimbursement workflow.

Sending or receiving funding between LLCs

An intercompany bank transfer may provide funding before any expense has occurred. Suppose Oak sends Pine $1,200 that Pine is expected to repay:

Pine later repays $450:

Pine still owes Oak $750. The funding and principal repayment affect balance-sheet accounts. Any agreed interest is recorded separately from principal. The examples assume repayable funding; they do not establish the tax or legal terms of a long-term intercompany loan.

Recording these situations in Mogul Books

1. For an imported bank movement, select Transfer, then click Inter-company transfer below Destination Account. Incoming transactions offer Receive funding or Receive repayment. Outgoing transactions offer Send funding or Repayment. The imported bank or card entry establishes the direction; choose the purpose explicitly. In Manual Entry, select the direction and the purpose labels update to match. Use this LLC’s accounts returns to an internal transfer.

2. Select the other LLC. If no related companies exist yet, the creation panel opens automatically instead of requiring an empty selection. To add a new company later, open the company dropdown and select Add another company to open the panel on the right. Enter its name, optionally link an existing Mogul Books organization, and click Create company account. The panel closes and the company is selected on the transaction. Creating or changing the company keeps your selected funding or repayment purpose. Creating a related company does not create a new organization or give access to its books.

3. The app creates only the required Due from or Due to account and links it to the company record. Account names and codes use the company's name, for example Due to Oak LLC with code 2350.IC-OAK-LLC. Later transactions reuse that company and account. The other account is created only when an operation needs it.

4. For a card purchase paid for another LLC, select Spent / Refund, then click For another company below Category. In the benefiting LLC, use Manual Entry, click For another company, and select Another company paid this LLC's expense, then choose the expense or asset and its property.

5. Use View company balances and activity to review approved amounts owed to and from the LLC. Partial repayments leave the unpaid balance visible.

6. Open Setup → Organization & Accounting → Related companies (after Investors List) to maintain the list. Rename updates the company and its linked GL account names/codes while preserving all transaction links and balances. Deactivate hides it from new selections and preserves history; enable Show inactive companies to find and reactivate it. Delete removes the company and its unused accounts only when there are no journal lines (including pending transactions), opening balances, or other accounting references. A zero balance does not mean a company can be deleted.

Each organization records its own side. Linking a company does not automatically post a counterpart entry in the other organization's books. When an imported bank or card transaction already exists, review that entry rather than adding a second manual record for the same movement.

B. Member distributions paid by credit card

When a company-card purchase is to be recorded as a member distribution, select Member Distribution in Needs Review and choose the member in Investor. This records the amount against that member's distribution account instead of an expense account, while retaining the charge on the original credit card.

For a $100.01 card charge assigned to one member, Mogul Books posts:

For a charge shared by members, check multiple investors, then enter amounts or choose Split by ownership percentage. Allocations must equal the entire card charge, including cents. Use the members who benefited from the purchase; choose ownership splitting only when that allocation is intended.

The later bank payment of the card is a separate Card Payment: debit the card liability and credit the bank account. It does not record another member distribution or expense. A credit-card refund is a separate reversal to review, rather than a new outgoing distribution.

For a manual transaction, select Member Distribution, choose the credit card in Paid From (Bank Account / Credit Card), and select the member. When an imported charge already exists, classify that charge rather than entering it again manually. This workflow records a classification chosen by the user; it does not decide the appropriate tax treatment.

C. Meals and Entertainment

Use 6080 · Meals and Entertainment for business-related meals and entertainment, including meals during business travel. The account is a single posting category without separate meals or entertainment sub-accounts. Record the full charge and retain the receipt, purpose, and attendees in the supporting records. Transportation and lodging remain in 6030 · Travel.

The combined account name does not determine the tax deduction. Eligible business meals are generally subject to a 50% limit, while entertainment is generally nondeductible, with exceptions; retain enough detail for tax preparation. See IRS Publication 463.

D. Spending and refunds

Use Spent / Refund for ordinary spending and for reversing a prior expense or income amount. Received remains available for ordinary receipts.

• Vendor refund to a bank account: select Spent / Refund and the original expense category. Debit the bank and credit that expense, reducing the expense.
• Vendor credit to a credit card: select Spent / Refund and the original expense category. Debit the credit-card liability and credit the expense, reducing both the amount owed and the expense.
• Refund paid to a tenant/customer: select Spent / Refund and the original income category. Debit that income category and credit the bank, reducing income.

Imported transactions supply the direction automatically; the source account and amount remain unchanged. Choose the original property when applicable and keep a memo explaining the reversal. For Manual Entry, choose Spent / Refund; check Refund received (money returned to this bank or card) only for an incoming refund. Leave it unchecked for ordinary spending or a refund paid out.

A security-deposit return uses Security Deposit Out, which clears the liability and supports deductions. Loan, member-equity and other special reversals need their applicable accounting workflow. An asset-purchase refund can credit the relevant asset GL account; it does not automatically update the fixed-asset record or depreciation schedule. If the imported refund already exists, review it instead of creating a duplicate manual entry.

The transaction-review shortcuts show common types directly. Click More types ▾ for security-deposit movements, member contributions/distributions and mortgage origination. Property Manager Payout is a visible shortcut when the organization uses property managers to collect rent. Rent stays visible when any active property collects directly; when all properties use managers, Rent is available in More types. After choosing a type, the Type dropdown still offers all available choices.

E. Correcting the loan selected for a mortgage payment

If a payment is assigned to the wrong loan, choose the correct loan before posting. Changing the loan keeps the interest and escrow amounts you entered; principal remains the payment total less those two amounts. Review the figures for the newly selected loan, then use Confirm Split & Post. The app posts to the selected loan's principal, interest and escrow accounts. Manual Entry also keeps the entered split when the loan changes. A missing required account or an unbalanced split must be corrected rather than clearing an amount automatically.

F. Shared expenses across properties

A bank payment or card charge can cover costs for more than one property. In transaction review, choose Spent / Refund, select the expense category, then use the Property dropdown to check the properties or units to share the cost. Selecting more than one opens their amount fields automatically. Enter each amount, or use Split evenly and adjust the amounts. Click a name in the dropdown to select just one property; checkboxes let you select several. Include an Entity Level portion when part of the cost belongs to the company generally. Allocations must add up to the original transaction amount exactly.

For example, a $100.01 shared travel charge can debit Meals and Entertainment or Travel, as appropriate to the actual expense, by $50.01 for one property and $50.00 for another, and credit the original bank/card account by $100.01. An incoming expense refund reverses the expense allocations while preserving the imported refund amount. The allocation controls use one selected expense category; use Manual Entry journal lines when different portions require different accounts. Manual Entry opens in a right-side panel with its own scroll area, keeping the ledger or report underneath in place. Allocate based on the expense's documented business use, rather than assuming an equal split always reflects the cost.

After approval, the ledger identifies the multiple allocations. Expand the journal or choose Edit Transaction to inspect each property's amount. Shared-property allocations require individual review and do not become a single-property automatic rule.

G. Mortgage payments with no interest

Use the lender statement to enter interest and escrow before posting a mortgage payment. If the payment has no interest, enter 0.00 and check I confirm this payment has no interest. This permits an intentional principal-only payment or a payment allocated between principal and escrow, while catching accidentally omitted interest. Changing the loan or split requires confirmation again and preserves the amounts you entered. The check appears in transaction review, Manual Entry and AI Chat Entry.

H. Incoming brokerage and bank transfers

For a Schwab MoneyLink deposit into this LLC's bank account, choose Transfer and select the Source Account the funds came from. The receiving bank is already known from the import. For an outgoing transfer, select the Destination Account instead. The app keeps the imported amount and direction: incoming transfers debit the receiving bank and credit the source; outgoing transfers credit the sending bank and debit the destination. A transfer between this LLC's own accounts does not create income or an expense. If the money belongs to another LLC, use Inter-company transfer and the funding or repayment purpose described above.

If the other account has no feed, choose Add unlinked financial account in the transfer account dropdown, or Add unlinked account in bank-feed setup. Give it a recognizable name, such as Schwab Brokerage 4321. This creates an 1110-series asset GL account that you can use for transfers in either direction, without a Plaid connection or a feed charge. It does not create an opening balance. Creating the account from a transfer selects it for you.

When both banks are linked and both imports still need review, the app shows possible transfers with equal opposite amounts in the same currency within five calendar days. Check the accounts, dates and descriptions, then choose Confirm Transfer from either side. Confirmation posts one journal on the withdrawal date and retains both Plaid source records, so the two imports do not become two transfers. Keep Separate rejects only the displayed pair if they are different transactions. Multiple possible matches require a choice; matching never posts automatically. This matching currently covers two pending imports; a second import arriving after the first was already approved needs separate reconciliation.

I. Property-manager statements with unit detail

Use the property columns when a manager's statement gives only property totals. If the statement identifies individual units, click Enter by units beneath the property name in its column header to add those unit columns. Use Hide units in the same header to collapse empty unit columns. Enter rent and unit-specific expenses under the unit; keep shared or unallocated costs in the property-level column. Do not enter the same unit amount again as a property total. Showing units keeps any property amounts already entered.

For example, enter $1,000 of rent for Unit 1, $1,200 for Unit 2 and a $100 shared repair under the property. The property's combined totals are $2,200 income, $100 expenses and $2,100 net, matching one $2,100 bank deposit. The read-only property summary includes the unit amounts once. Property reports include the units; unit reports show only amounts assigned to that unit. A cost left at property level is not automatically divided among units. If a manager provides no unit breakdown, retain the property allocation rather than inventing one.

Clear unit amounts before hiding their columns. The app preserves entered amounts and blocks hiding populated columns. Units inherit the property's manager; they do not need separate sender rules. Approved ledger rows identify allocations spanning several units or a mix of property and units; expand the journal to inspect the exact amounts.

J. Reviewing incomplete AI suggestions

AI can suggest a transaction type, an existing vendor or a property even when it cannot identify the right category. Review those suggestions and choose any missing category yourself. A blank category is not permission to post to an uncategorized account. Mortgage payments still require a reviewed split, and manager payouts still require a statement breakdown.

If no usable suggestion is available, or the category request fails, click Retry suggestion or continue manually. A retry can keep the accepted transaction context while requesting the missing category. Refreshing the register does not automatically repeat AI requests. Your manual selections take precedence over a suggestion that arrives later.

AI review distinguishes tenant rent from other receipts: direct tenant rental payments use Rent; laundry, parking and bank interest use Received; net property-manager remittances use Property Manager Payout. Incoming money alone does not establish income—refunds, deposits, transfers, borrowing and member contributions have separate meanings.

For inter-company transfers, AI can suggest an existing active company's Due from account for funding sent or repayment received, and its Due to account for funding received or repayment sent. Review the company and transfer purpose before approving. If the account has not been created, add the company/account through the review form. A lender name alone may not distinguish multiple loans with that same lender; select the correct loan using its supporting details.

Reviewing AI category suggestions

A recognizable merchant can suggest a category—for example, airline or rideshare travel, restaurant meals, or software subscriptions—even when the property still needs selection. A refund uses the original purchase category. Broad retailer purchases, unexplained transfers and payments to a lender with multiple loans may need your input. Suggestions do not determine tax deductibility; review the purpose and allocation before approval. Use Retry suggestion when a suggestion failed or its category remains blank.

When returning an imported payment to Needs Review with Uncategorize, the original bank or card account and amount are preserved. Only its accounting allocation returns to Uncategorized. When both sides of a card payment are pending, review the proposed match and confirm it once so the payment is recorded once.