View Full Version : Tracking investment
guardianfirstai
Jul 6, 2008, 10:37 AM
How do I entry the following into quickbooks construction version
One of the owner is renting equipment to the company on a monthly base, but leaving the monthly rent in the company? ( He is NOT taking a cheque, but reinvesting the amount back into the company)
Guardian
morgaine300
Jul 6, 2008, 12:57 PM
It would add to his capital.
Any time you skip steps and go directly from A to D, think about what B & C in the middle would be.
i.e. he rents to the company, which creates an expense on the company's part for the rental. Let's not skip that payment. So if the company actually paid the owner, it would come out of cash. And then it would be like if that owner put the money right back into the company. (From the cash point of view, that nets out, so you don't have to record that, and that's where you're skipping a step.) And if an owner is putting money into the company, it's an investment, which is his capital account.
guardianfirstai
Jul 6, 2008, 01:23 PM
It would add to his capital.
Any time you skip steps and go directly from A to D, think about what B & C in the middle would be.
i.e. he rents to the company, which creates an expense on the company's part for the rental. Let's not skip that payment. So if the company actually paid the owner, it would come out of cash. And then it would be like if that owner put the money right back into the company. (From the cash point of view, that nets out, so you don't have to record that, and that's where you're skipping a step.) And if an owner is putting money into the company, it's an investment, which is his capital account.
[COLOR="Blue"]so what you are saying is I just record it only into the capital account ( owners equity account):)
morgaine300
Jul 6, 2008, 03:33 PM
he rents to the company, which creates an expense on the company's part for the rental.
You've missed that part of my statement. You can't ever just record one side of something. There must always be at least two things involved. What has been "skipped" is going in and out of cash, which you don't record. But you still have to deal with the rental.