Level 15

Reports and accounting

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

End of the year you do journal entries, for each partner

debit investment, credit equity for the total in investment
debit equity, credit drawing for the total in drawing

then one more journal entry

debit retained earnings for the full amount
credit partner 1 equity for his portion
credit partner 2 equity for his portion
etc etc

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