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sdolcie
March 12, 2019
Question

How do I enter business expenses paid by personal credit card?

  • March 12, 2019
  • 1 reply
  • 0 views

I've been buying items for the business including materials for making products, equipment, office supplies using my personal credit card. how do I enter these transactions?

Thank you for your help.

1 reply

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Taxgirlie
March 12, 2019

Hi sdolcie

You will want to record these purchases as an Owner Contribution to the business.  Go to your Chart of Accounts and enter the following accounts.  First = Owner Capital Account (Equity type) and also two subaccounts called Owner Contribution and Owner Draw.  When you purchase the items make a journal entry that you Debit the expenses, such as office supplies, and Credit the Owner Contribution account.  If the business pays you back = write a check using the Owner Draw Account in the account section at the bottom of the check.  This will get you by in the meantime - but at tax time I would speak to your accountant if they would prefer that you loan the business money and collect interest from the business on what you loan it.  This is a good tax time talk to have with your accountant since they know how you are organized and of course the Canadian tax laws.  Hope this helps! : )

    C
    contact10
    March 12, 2019
    Hello, I have kind of the same problem. I live in Morocco but I have my company settled up back in the US ( LLC, partnership). Some of my bills have been paid through a company credit card through Bank of America. I entered these bills and matched them with the bank statements. However, I have bills that I have paid through my personal bank account or in cash. I entered these as bills and it showed up as unpaid ( accounts payable) while they are already paid. My first question is how to change this mistake ? My second question is how to do end of year accounting for my company based on this data: expenses paid from personal account, expenses paid from bank associated with the company, and revenues. Thank you very much for your help. I will appreciate.
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