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Level 1

How to record personal assets transferred to your small business?

Hello my partner just started his own small business, he is the sole proprietor. He just purchased his own trailer with his own money and also has a truck that he will be using only for the business.

How would I record the transaction into quickbooks as assets to the company?

 

Further more he has paid off his business credit card with his own personal money. How would both these transactions be recorded using quickbooks online. 

2 Comments 2
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Level 5

How to record personal assets transferred to your small business?

Hi Spineback Accounts:

 

A personal funding of a business expense results in an 'equity' posting.  As such, you should record the asset (trailer) and a balancing entry in owner's equity.

Similarly, the paying of the corporate card with personal money would be:

Debit Liability of Credit Card, Credit Owner's Equity

 

This represents the fact that the owner/proprietor has funded the business with personal funds, and the business owes them money longer term.  When profitability / cash resources allow, the business can then cut a check to the owner to reduce that liability.

 

Hope this helps!

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Level 1

How to record personal assets transferred to your small business?

Yes it does. Thank you