Hi there
This type of problem is really common. The problem is that a puppy will not understand that going inside is undesirable as compared to outside, all they know, is that they will return to the spot where they have been before, which it can recognize by scent.
Basically, inside in the living room is continuously your dogs toilet because it can smell that it has been there before even though you cannot.
You will have to buy a quality DOG ODOR neutralizer, which you should be able to find at most good pet stores. Clean your carpets, with the odor neutralizer, in all the known places that you can find where your dog has been .
This will help disguise the scent and you will find it easier to catch your dog preparing to go potty before it has the chance to do so inside. No product can take away the scent 100%, however the weaker the scent is made the better, so buying an odor neutralizer will still be worthwhile.
The next time your dog has an accident inside:
Growl as your dog is doing it. You must reprimand your dog as it is performing the undesirable behavior, because dogs only ever associate your punishment or reward with the very last action they have performed.
Soak up the puddle or pick up the waste with a sheet of newspaper.
Then clean the spot with your odor neutralizer.
Keep the soiled newspaper, place any solid wastes or the soaked paper outside, or wherever you want their bathroom spot to be. This will give your dog a place it can return to that is marked with its own scent and therefore safe to use as a bathroom. (keep in mind that dogs mark their territory and therefore claim their dominance as they eliminate, if another dog has been where you want your dog to go, your dog will only go there if it is of a dominant disposition and wish to challenge the opposing 'dog'.)
Make sure that your designated urination area is the same place all the time. Do not move the piddle pad, newspaper or outside spot around.
Try to be present when your dog relieves itself in the correct location, else it may hold on until it is in your vicinity before releasing the load so to speak.
If there is a particular room that your dog is urinating in then after you have neutralized the odor and let it dry, you can try to feed your dog a few treats in the same spot. It will start to associate the area with eating rather than urinating.
I dont think that you need to gate both dogs. The older one should be fine if that spot is de odorised. If, however you have problems with the older one than by all means gate both of them.
Once the smell has definately gone you really should not have so much of a problem. This of course needs to be combined with letting your puppy know that the behavior is completely unacceptable and what the right place and thing to do is.
I hope that this helps
