I have setup a capital account and wanting to get some info on what categories to put monies withdrawn to purchase equipment but I am paying it back. So how do I put this, withdrew $11000 to purchase equipment for my business and then I have paid $2000 of it back. Would it be members draw or member equity for both. one would be credit and the other debit. Just need to know if I'm on the right track.
Can you start again telling us exactly what you have done?
Namely, withdrew money from where? Is this refering to your personal account?
Assuming that what you mean is that you have taken personal money of $11k into the business and repaid yourself $2k to double entries would be :
Cr Capital 11k
Dr Bank 11k
Cr bank 11k
Dr Fixed assets 11k
Dr Capital 2k
Cr Bank 2k
So your Capital account would be $9k
And bank would be $2k overdrawn
Note that the Dr Capital would generally be shown as Dr Drawings which in the equity account would be shown seperate to the Capital but still adjusts the Capital. In principle though the two approaches have the same result.
The balance sheet on the above would be
Fixed Assets $11k
Current Assets ($2k)
Capital Account $9k
The above assumes tha we are talking on the same lines which I'm not sure that we are.
I also note that you use $ rather than £ so whilst bookkeeping is fundamentally global it must born in mind that any answers given will have a bias towards UK GAAP and tax regulation.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Ok, I'm in the US. The account I'm speaking of is a personal Capital account.
This is just to regulate and keep my investments separate then the business and personal transactions.
I have rental property and plus I put some cash in now and then for capital growth.
Recently I basically borrowed $11000 to purchase equipment for my business.
I am paying it back from the business account. I use Quickbooks for my bookkeeping.
I was needing to know what categories to record these transactions.
Since it was money I originally invested and then borrowed and now I am paying it back, I wanted to know if members draw category would be appropiate for the credit and debit portion of the transaction.
I think you may want to try and find an American forum, we don't have the same tax rules as you as Shaun noted.
As you are a QuickBooks user have you tried asking either the desktop or online community groups? The community groups are basically forum much like this but dedicated to QuickBooks users, I believe each forum is country based so you will hopefully find an AIPB or CPA who will give you some pointers, they will have knowledge of your accounting practices and tax set-up.
It's not that I wish to be unhelpful or seem like I am pushing you off the site, you are of course a welcome addition, but the wrong advice is worse than no advice!
I hope you find the information you need. I Looks to me like you have loaned your business money for Capital investment and are now repaying part of the loan - that would change the accounts Shaun mentioned.
