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sdolcie
Mar 12, 2019 1:37 AM UTC
Question

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

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.

4 replies

Taxgirlie
Mar 12, 2019 1:37 AM UTC

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! : )

    contact10
    Mar 12, 2019 1:37 AM UTC
    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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