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A
adewae01
October 26, 2020
Question

Price paid to vendors but owe investor instead

  • October 26, 2020
  • 1 reply
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We are a new startup that has had to use family financial investments. To get started, whereby the actual vendor is paid off, but now the company needs to repay the non-owner family members back. Any thoughts on how to do this?

1 reply

Q
QBsguru
October 26, 2020

Record the bill payment through a fake bank account.  Call it clearing.  Then debit the bank account for the bill payment amount using a journal entry and credit a current liability account to the person that needs to be paid back.

 

When you pay back this person, use the current liability as the expense account on the check.

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