Hi Brendan17, this transaction will typically be recorded as an asset account to reflect your new ownership. A share purchase of this size is generally treated as an investment (an asset) rather than a business expense. However, I recommend consulting with your accountant for further clarification.
Here's how:
- Go to All apps, then Accounting, and click Chart of accounts.
- Select New.
- In the Account name field, enter the name of the account.
- Fill in the necessary details for Account type and Detail type. Given the details you provided, it’s best to consult your accountant before proceeding to ensure these accounts are classified correctly
Regarding the £150,000, most of this amount is the cost of buying your share in the company, not a normal business expense. Because you bought the shares by paying off the company’s debt, it is advisable to consult your accountant to confirm how much stays as an asset, what part (if any) is deductible, and to help you post the journal entry to clear the debt properly.
For further questions or concerns, you can leave a comment below.
