How to report a bill was paid in journal entry?

Question

I have a couple bills in my name in QuickBooks from business expenses that I paid for personally. I have since paid myself back ("paid the bill") but it was during the early months of my business (no business checking account, poor accounting, etc.). I am trying to back-fill my books and bring everything up to date.

How can I reflect these bills as paid without showing that a check was written from a specific bank account?

I need to basically show that I have paid myself back from all the expenses that I put on my personal credit card. Again, the bills are entered already, so my books just show my business in debt to myself.

Answer 1

You can do this through a journal entry in Quickbooks. It can all be entered as one entry, there's no need to do separate ones for each bill.

The journal entry should debit Accounts Payable and credit your equity account. In the line for Accounts Payable, make sure to choose your name in the 'Name' column. This, in effect, enters a credit to your account, which will offset the bills that were shown there previously.

The last step is to apply those credits to the bills. Even though they offset each other, your name would still show up in any Payables reports and in the Pay Bills window. To do this, open the Pay Bills window and select one of the bills owed to you. There should be an option to choose 'Apply Credits' or something similar (depends on which version of Quickbooks you are running). Choose that option, and apply credits in the amount of the bill, so that it zeroes out. Do the same for all of the other bills. Once they are all checked off, click the button to Pay Bills. This won't actually 'pay' anything, but will instead just apply the credits to the bills as indicated.