Creating Owners Draw Sub accounts - and how to close them out at the end of the year.

You would never close out Owner Draw to Retained Earningd. You would close out Draw and its companion Contributions on 1/1 to Owner Equity itself. You also close out RE to Owner Equity. Closing out the Draw on an annual basis is merely an exercise in tracking your annual equity movement between draw and contribution but at the end of the day you can still run reports on an annual basis so moving equity between equity accounts has no effect on your balance sheet

Thanks John for the reply.. my apologies for trying to take this slow.. im just trying to self-teach myself this, the learning curve is steep.   

Follow on question based on your response....

Currently I have the following setup....

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Equity

-->> Owners Capital (renamed from retained earnings as im a sole prop..)

-->> Owners Equity

--------->> Owners Contribution

--------->> Owners Draw

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Based on your reply, if I understand, you close out Owners Draw and Owners Contribution on 1/1 to Owners Equity.  Given the setup above would you still recommend that?   In other words.. did I mess up my chart of accounts organization for the items above.. or does it need to be re-arranged?  When I closed out the info provided on my first question.. it added everything into Owners Capital as of 1/1.  

Again.. thank you very much for your time.