Rental balance sheet

[Babu Byrapuneni]

Hi, I'm working on the balance sheet for my rental (multi-member LLC) and need help. Rental bought in 2023 and initial return.

For assets - Cash, depreciable assets less accum deprn, land

For liabilities - Open credit card balances (Charged rental improvements and expenses on 0% interest credit card)

Partnership equity - Cash contributions less net loss

My assets are greater than liabilities + partnership equity

[Kristen Ambrose]

Hi Babu,

A simple rental property balance sheet will have the following accounts:

Assets: Cash, tax and insurance escrow, fixed assets and depreciation

Liabilities: Credit cards, security deposits, and loans

Equity: Opening balance equity, owner's contributions/distributions, retained earnings and net income

There could be a number of reasons that your balance sheet does not balance. Here are the sample journal entries for the accounts you mentioned:
1. Owner cash contributions:

DR. Cash (Asset)

CR. Owner's contributions (Equity)

2. Purchase of property with cash:

DR. Building (Asset)

DR. Land (Asset)

DR. Closing Costs (Asset)

CR. Cash (Asset)

3. Credit card purchases 

DR. Rehab Expense (Expense, which contributes to NI within Equity)

or DR. Capital Improvements (Asset)

CR. Credit Card (Liability)

Your balance sheet starts off balanced, so each transaction should keep the accounting equation Assets = Liabilities + Equity true. Perhaps one of your transactions was booked incorrectly. Hope this helps!