Owner's Contribution and Draw

I suggest that after the first of the year, and after any income tax adjustments are made, you:

1. clear equity drawing to equity, debit equity & credit drawing for the amount in drawing

2. clear equity investment to equity,  debit investment for the amount in the account, & debit equity investment

then if you want money out, cut a check and use equity drawing as the expense (reason) for the check

you can do that at any time, but I think it is cleaner to start the new year with equity investment and drawing at zero for the new year

For a company taxed as a sole proprietor (schedule C) or partnership (form 1065), I recommend you have the following for owner/partner equity accounts  (one set for each partner if a partnership)

[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here

Thanks, Rustler. 

I like the idea of starting the year fresh, you answered a question without me asking it! 

I just remained the accounts to:

Owner's Equity 

>> Equity
>> Equity Drawing
>> Equity Investment 

If I understand 1 & 2 correctly, and did you mean credit here --> "2. clear equity investment to equity,  debit investment for the amount in the account, & debit equity investment"

I just do a journal entry for drawing and investments to move the money to equity. Assuming the "equality" account will always show past and current year totals.