Adding initial franchise costs to accounts

Any personal funds used for business is Owner Equity Contribution. Record a journal entry of credit equity 20k debit the fixed asset  franchise fee. Same with your startup costs which may or may not be current expense----consukt your tax CPA.

A good way to track is to create a dummy clearing bank type account and post checks or expense out of it and deposits in turn from owner equity. This is better than journal entry which loses tracking by name and blurs distinction between cash and accrual

Congrats on entering the world of purchasing a franchise. The previous post is correct as far as the accounting entries. Going forward it would be easier to track business expenses if everything came out of a business account. Rather than pay for items, vendors, etc. out of your personal account, transfer the money to a business account (open one in the business name/EIN if you haven't) and then pay the bills from there. It makes a much cleaner set of books and an easier audit trail if you ever need to do a historical clean-up project. This way you will know exactly what was funded personally as equity and what the business expenditures are.

This might also be helpful, we recently wrote a blog post about franchising. Here are 5 other things that will be helpful to know as your get your franchise off the ground.

Again, congrats on your new venture and I wish you continued success!