I'm learning to use double-entry accounting to manage some shared property. I've established how to manage the development of the property, this was answered nicely here: http://www.experts-exchange.com/Other/Consulting/Q_28570699.html
I now want to manage the annual rental business, and would like to check how typical transactions should run.
Suppose in the first year the property earns 5000 in rental income, and incurs expenses of 3000. Is the following then correct?
Debit property bank account: 5000
Credit rental income account: 5000
Credit property bank account: 3000
Debit rental expense account: 3000
This yields a profit of 2000. I can either use this to settle some of the debt on the property, or I can pay it out to equity shareholders. Presumably the former would be:
Credit property bank account: 2000
Debit liability account: 2000
Is this correct, or are there more transactions I might need? And how might I process a payout to equity shareholders?
Many thanks again for your help!