Opening account balance, previous personal debt on credit card used for business
I purchased a business 10 months ago and during the chaos of getting up and running I was using my personal credit card for business purchases. The credit card already had a balance on it that was from personal debt. How do I account for this personal debt with in the business. Do I just start the credit card account at 0 or do I enter the approximately 4000.00 as a shareholder distribution?
You can set up a credit card account with zero opening balance and use it against your business expenses. I can guide you on how to complete this.
Click Chart of Accounts. Then, click the Account drop-down at the bottom.
Click the Credit Card radio-button.
Click Continue. Then, enter the account information. Don't enter an opening balance.
Click Save & Close.
Once done, you can record your business-related expenses using that account.
You can read more of the details by pressing F1, then type "How to pay for business expenses with personal funds" in the search field. Just click the Record transactions that mix business and personal funds link.
Re: Opening account balance, previous personal debt on credit card used for business
Thank you for your reply. I have already created and reconciled multiple credit cards for 10 months now. My problem is that I already entered the opening balances on the personal cards that had a balance, I then began using these personal cards for a mix of personal and business purchases. If I entered a zero balance when i initially opened the account in quickbooks then how do I account for the interest expense that was from personal charges that first month? What do I categorize the opening balance as? Should I start over and entera zero balance upon creating the account?