Cancellation of Intercompany payables and receivable

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Posted on by Zuhair Haider

I have a created an intercompany transaction between Company A and Company B.

Now, in Company A I have an entry for the Intercompany receivables:

Intercompany receivables (A/B) 100
Bank 100

Similarly, in Company B, I have an entry for the Intercompany payables:

Accounts payable (Vendor Balance) 100

Intercompany payables (B/A) 100

How do I treat the intercompany balances? I understand that these gets eliminated in consolidation, but what if I am not consolidating, how do I cancel/pay off these balances?
The intercompany payable/receivable is not tied to the subledger, how do I mark the exact entries in respective entries for cancellation.