and now we will learn how to build tenants for shared utilities if you have any questions about
this topic you can leave them in the comment section below and I'll do my best to help you
and of course if you feel the video helped you I hope you will click like and don't forget to
subscribe to get updates on new videos that come out all the time examples of shared utility costs
are all tenants are under the same electric meter the cable internet is paid by the landlord for
the whole building or water could even be built under one meter why is it build differently than
repair or cleaning well in this case there's no specific event or service date that you wrote a
check for there is no specific check or bill that you can put on a tenants invoice like we did when
we did repair and cleaning bill to the tenant so what can you do well if you agree with the
tenant of the amount of utility charge that will be added to their monthly invoice then
you can create an item on the items list that will be added to the monthly rent invoice and
that item will be for that tenant share of the utility so remember we talked about the items
list we said look if you are the monthly rent and you put that item on an invoice the income
account rental income earned should increase and we even learned another example of items if
you put a late fee on an invoice then the account and the chart of accounts that should increase is
income from late fees well then doesn't it make sense that if you put an electric charge on the
invoice that the account that should increase for that item should be income from electricity well
you could you could put another income account income from electricity and then when you put
the utility charge on the invoice you could make that account go up if you want but if you do it
that way you would have to subtract out what you actually paid for electricity as an expense for
the whole building in order to determine your real electricity cost so that's not the proper
way to do it what is the proper way to do it well instead of having the item connected to income
from electricity which is not running you should instead have the item be connected directly to
the electricity expense account the main one this way when you pay electricity for the building it
goes up but then when you charge the tenant the electric expense it will decrease the overall
electric expense at the moment you charge the tenant just like before we click list item list
and the items list opens now from the bottom left let's just make this a little bit wider
so we can see the account from the bottom left we click item new and this counts as a service
and we'll call this will capital letters tenants electricity share so we're charging the tenant $25
a month for their share their agreed-upon share of electricity but the account that we connected
to is electric expense so when we place this on an item instead of an income account going up
and will be an expense going down we click OK and now let's take a look at an example let's
imagine on February 5th we paid the whole Peyton Place building electric bill $100 to con Edison
that's the electric company out here in New York so let's go ahead and to do that now before we do
that you may notice that there is no electric expense at all on the trial balance because we
have not used it yet here in the course so let's go ahead and write a check let's make sure it says
February 5th and by the way to make this course a continuous little story make sure it's February
5th of 2020 now con Edison is the electric company out here in New York the amount we're paying for
the whole building is $100 and the name of that expense is electric expense notice we do not
put the customer because we are not putting this specific check on an invoice later so don't put
anything here just click Save and close and notice that electric expense showed up for the first time
in the trial balance as $100 now let's imagine on February 28th we gave Freddie frota the February
28th rent invoice and we're going to add to the normal rent the $25 agreed upon electricity charge
that's Freddie's share of electricity no problem we open the invoice and we know that this is the
February 28th of 2020 and remember this invoice is coming from well you have to check if you go
to the rent balances to go down to Freddie frota you can see Freddie froda has a zero balance so
he didn't pay you the money in advance which means this is going to go on rent receivable
rent receivable because he has a zero balance he did not pay February's rent in advance anyway we
choose Freddie froda and now we're going to put his normal monthly rent rent due and if you forget
how much the rent is for a particular tenant again you could look right on the red balances and you
can tell Freddie pays what it looks like pays a thousand a month so we'll put $1,000 on the
invoice but now we have to add to the invoice the tenants electricity share and it says is this is
associated with an expense account yes we do want to continue we want the odd notice it remembered
by the way the $25.00 because that's what we put when we set it up in the items list you can't
do that with attendance rent because everybody's rent is different but you can do that if they all
agree to pay the same electric share so what will happen when we click Save and close if we open the
trial balance you see that the general electricity expense for Peyton Place has decreased by $25 and
if we double click and open it up we can see that originally we paid $100 on the fifth but because
we said Freddie froda an invoice for $25 for this particular expense and went down and if you go
and you look at the rent balances specifically for Freddie froda you can see his balance went
up not only by the monthly rent but it also went up by the amount of electricity charge
you