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dawz007
May 28, 2022 7:53 PM UTC
Solved

Owner pays with personal account

Hello,

A shareholder of the corporation I’m doing the books for regularly pays for company expenses with his personal accounts and then e-transfers himself the amount  from the company. How to I record these transfers in QBO, I’m not sure which accounts to use. 
thank you.

Rainflurry
RainflurryAnswer
May 28, 2022 8:13 PM UTC

@dawz007 

 

Create a liability account called 'Due to Shareholder'.  To record the expense incurred by the shareholder on behalf of the corporation, create a journal entry: debit the appropriate expense account, credit the newly-created 'Due to Shareholder' liability account. This books the expense and creates a liability for the corporation to reimburse the shareholder.

 

Then, when you record the EFT payment to the shareholder, assign the payment to the 'Due to Shareholder' liability account.  This will remove the liability.

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4 replies

Rainflurry
RainflurryAnswer
May 28, 2022 8:13 PM UTC

@dawz007 

 

Create a liability account called 'Due to Shareholder'.  To record the expense incurred by the shareholder on behalf of the corporation, create a journal entry: debit the appropriate expense account, credit the newly-created 'Due to Shareholder' liability account. This books the expense and creates a liability for the corporation to reimburse the shareholder.

 

Then, when you record the EFT payment to the shareholder, assign the payment to the 'Due to Shareholder' liability account.  This will remove the liability.

    dawz007Author
    May 28, 2022 9:21 PM UTC

    Thank you!

    I just want to be sure I’m understanding correctly. 
    I debit my supplies account for the, let’s say $100, credit my due to shareholder account for the $100. Then I categorize my eft to the due to shareholder account? Still selecting the appropriate Tax Code for my area all the way through, correct?

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