3

Let's say I own a business and I make 3 business-related purchases on my personal credit card in August. Given the following example expense report:

  • 08/01/2011 - $20 - Web Hosting
  • 08/05/2011 - $130 - Memory Cards for Camera
  • 08/20/2011 - $50 - Printer Ink

How would these get recorded as journal entries if I wanted to be paid back for these expenses?

4

In your journal entry, debit the appropriate expense account (office supplies, etc) and credit your equity account. The equity account should be called something like Partner Investments or something like that.

You can choose to enter these all separately, on the specific dates listed, or as one entry. Some people choose to summarize the expenses they've paid personally and only enter one entry per month or so, to minimize data entry time and also because the end effect is the same.

Of course, the above is assuming you are considering these purchases to be investments in the company, and not expecting the company to repay you. If you are expecting repayment, you could enter a bill instead, or credit an account like 'Loan from Shareholder' rather than the equity account.

  • Thanks for your great responses! I should have been more clear in this question because I did want to be repayed. – Brian David Berman Aug 24 '11 at 3:44
  • 1
    Glad I could help! So, instead of crediting your equity account, you should credit an account called something like 'Loan from Shareholder'. Another option is to forgo the journal entry method altogether and enter a bill, payable to you, and classify it to the correct expense. This would make any payments due to you show up in any Payables reports. To repay yourself, you would use the 'Pay Bills' function. – superjessi Aug 24 '11 at 4:00

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.