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ysafo
Level 1

I just bought out my business partners with a wire transfer from my personal bank account. How do I record the amont as an owners investment or loan to the business?

 
1 Comment 1
john-pero
Community Champion

I just bought out my business partners with a wire transfer from my personal bank account. How do I record the amont as an owners investment or loan to the business?

It may have been better to have made a deposit from personal funds to business and then cut a business "check", but....

 

You have two transactions involved. Adding to your Owner Equity and eliminating your partner's Owner Equity.   So start by coding your wire transfer as your Owner Contribution into a clearing account. Then posta credit from the clearing account against the other partner's equity.

 

You could skip the double entries and leave your personal funds out of it and simply move by journal entry his equity to yours bt you lose the paper trail and the reason and in fact you may have bought out for a number that is not equal to his equity,

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