For 2008, the rent of $1677 per month. So each month I receive cash which is an asset. So I debit rent $1677. The total rent received for 2008 was $20,124.
___INCOME_______
DEBIT CREDIT
$1,677
However, I have to pay the mortgage which is an expense. So each month, I credit $2,356.
___EXPENSE_______
DEBIT CREDIT
$2,356
This does not include the expenses for
1) Repairs of $8,401 accrued.
2) Taxes
3) Interest Expense of $12,999
Because of a refinance in March 2006 (3 years later) to $200,000, the Liabilities went up.
Some of this money was transfered to Etrade.
Others was used for repairs and renovation. In 2007, I spent $8,289 for renovation. Due to move out of tenant, I retiled the entire living room, main bedroom and kitchen. Installed new countertop, cabinets.
___REPAIRS/RENOVATION_______
DEBIT CREDIT
$8,289
Assets = Liabilities + Shareholders Equity
$200,000 = $200,000 + Negligible Equity
The following year, I decided to give Atlantic Street a new face lift. The expenses were $13,581 which included $6,831 for improvement for new siding.
Since then I had to purchase a new water heater, a new furnace, a new sump pump.
We had two floodings in the basement.
The first one occurred in summer of 2007 when water from massive summer rains came and through the foundation. The result was a ruined furnace and water heater.
These were liabilities. So for the accounting equation, I credited cash (asset) from my bank account and I debited repairs (expense account)
Note, in July 2005, Atlantic Street experienced a fire in the bedroom upstairs. The children were playing with matches and lit the mattress on fire. Everyone evacuated, but the firefighters came through the roof and broke all the windows in the house.
Repairs conducted after this included opening up the ceiling to expose the attic and create a cathedral ceiling.
In addition, we opened up two closets and created a nice size den.
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