How to Record Refund?

[AmyKidsCo]

I have parents pay for their last 2 weeks up front, in case they leave without giving notice.

Last week I terminated a family's contract and refunded the amount they'd paid for their last week of care. Since they started 18 months ago the last 2 week payment was recorded as income and tax paid on it back then.

Do I record the refund as an expense?

[Michael]

From Tom Copland:
https://www.daycare.com/forum/showthread.php?t=91765

Originally Posted by TomCopeland

If you refund any money, report it as a business expense. Call it "parent refund" and put under Other Expense on Schedule C. Assuming your got the fee in 2018 and refunded part of it in 2019, you and the parent don't amend 2018. You claim the refund as an expense in 2019. The parent reduces the amount they paid for child care in 2019 by the amount they got from the refund.

[AmyKidsCo]

Thanks Michael.

I hate the financial aspect of this job.