I need some advice on the best way to post when a director uses a personal funds to purchase assets for the business. For smaller purchases I have been running a Bank Account named 'Directors Loan Account' as I have found this easier keep track of the day to day ins and outs. I feel that it would be best to keep this separate from any major purchases as explained below.
First scenario; He has invested £7500 of his own money into the business to purchase a set of car ramps. This was paid through his personal bank account so I need to journal this into the business accounts and one day in the distant future I expect I will be journaling it back out when he takes his money back.
Second Scenario; He has taken a £4000.00 personal loan to fund other assets; 2 x commercial vans; 1 x customer courtesy car. Once again he has paid for these through his bank account and also in cash. I need to journal the assets into the accounts and also set up the monthly loan repayments (and loan interest) as the company will be repaying the monthly loan payments to him so that he can then repay the bank.
I hope all this makes sense. Your help would be much appreciated in regards to the correct journals to do. Although I get on with day to day accounts fine I am still getting to grips with 'start up' journals and depreciation etc.
Company cant claim interest relief on the loan as it is a personal loan rather than a company loan. So just Dr the full loan and interest payment by the company each monthly to him personally to DLA.
