Business Car Purchase Using Partial Personal Funds

Welcome to the Community, Rupa.

Let me share information on how to record business car purchases in QuickBooks Online (QBO).

Beforehand, we want to let you know that we don't propose mixing business and personal expenses. That way, you can go over your business flawlessly. However, there will be times when we can't prevent it from happening. So, if that time comes, we can follow the process below to handle it in QuickBooks.

In QBO, you can create an asset account to track the current value and depreciation of your vehicle.

Here's how:

1. Go to the Gear icon, then select Chart of Accounts.
2. Select New.
3. In the Account name field, enter the name of the account.
4. From the Account Type dropdown, choose Fixed Assets.
5. In the Detail Type dropdown, select the option that closely describes the asset.
6. Name the account, then select the Track depreciation of this asset checkbox.
7. Enter the current value of your asset in the original cost field and the as-of-date.
8. When you're done, select Save and Close.
9.  

On the other hand, to record the business expenses you paid for with personal funds, you need to create a journal entry to record the business expenses you paid for with personal funds.

After that, we have the option to decide on a reimbursement method, such as recording it through checks or as an expense. When doing the process, we suggest consulting with your accountant or a QuickBooks Certified ProAdvisor to guide you through the process to ensure the accuracy of your account since they know what's best for your business.

To create a Journal entry, here's how:

1. Click + New and choose Journal Entry.
2. Select the expense account for the purchase.
3. Enter the purchase amount in the Debits column.
4. Next, select Partner's equity or Owner's equity.
5. Enter the same purchase amount in the Credits column.
6. Then, Save and close.

For the second option, refer to this article for complete details: Pay for business expenses with personal funds.

Furthermore, please know that we recommend avoiding mixing business and personal expenditures. To learn more about handling returns to owners, partners, or employees, check out these resources:

• Pay for personal expenses from a business credit card or bank account.
• Reimburse an employee.

Let us know if you need anything else related to QuickBooks. We are always happy to lend a hand to you. Take care always and have a great business!

@RupaPodila 

You can use a free billing management app to sync with QBO and reimburse your business expense to your personal account.

@Deity Alpha 

You can use a free billing management app to sync with QBO and reimburse your business expense to your personal account.

Can you actually help the OP with their issue or are you just trying to sell them something?  The OP does not need another app for this simple transaction.  

@RupaPodila 

1) Create an Expense transaction (New > Expense).

2) Choose the company bank account under 'Payment account'.

3) Under 'Category details', on line 1, select the vehicle's fixed asset account and enter the amount as $38,000.

4) On line 2, select your owner's capital/equity account (if sole proprietorship) and enter the amount as -$8,000.

5) Click Save and close.

Hi @LollyNino_C 

Thank you for the response, I am trying to add a fixed asset account but I don't see an option to select the Track depreciation of this asset checkbox. Can you please help ?

Let's locate the Track depreciation of this asset checkbox so you can create a Fixed Asset account, RupaPodila.

Before we begin, please be aware that the Track depreciation of this asset checkbox is intended for accounts that represent the value of fixed assets, not for accumulated depreciation accounts.

Since accumulated depreciation means to decrease the value of a fixed asset over time, the checkbox disappears if you choose any of these three Accumulated detail types: Accumulated Amortization, Accumulated Depletion, or Accumulated Depreciation.

To display the checkbox, please ensure to choose the correct Detail Type and follow the steps below:

1. Go to the Gear icon and choose Chart of Accounts.
2. Click New.
3. Press the Account type dropdown, then select Fixed Assets.
4. From the Detail Type Dropdown, choose according to your preference.
5. Fill out the Name field.
6. Tick the Track depreciation of this asset checkbox.
   
7. You can also fill out the other field.
8. Once done, review the information you've entered, and then click Save. 

Also, I recommend seeking advice from your accountant to ensure the proper setting up of your account.

You can also view these screenshots for more visualization and comparison regarding the difference if you choose any of the Accumulated detail types:

For more reference regarding the information above, you can visit this article: Set up an asset account in QuickBooks Online.

After setting up the account, you can also Manually add transactions to account registers in QuickBooks Online.

I'll be around to help you further, RupaPodila. Please feel free to let me know in the comment section.