Have a line of credit for a small business- have brought in the cash into the checking account and recorded the draw amount under liability on the balance sheet. Client wants the P & L to reflect a reduction in the expenses. I cannot figure out the other side of the equasion if I credit expenses what do I debit on the P & L?:confused:

What reduction in expenses? The client borrowed money. The only expense involved would be interest when it's paid, or accrued at period end, and it wouldn't be a reduction in expenses, but an increase. Tell the client you can't do that because it's incorrect.