Where's the time machine?

epitomaepitoma Member Posts: 12

I taught myself some bookkeeping basics so I can have intelligent conversations when I can finally pay for a bookkeeper.
Like many, I started a small business using personal credit cards to pay for everything. As a thought exercise I was thinking about how I might do things differently with the knowledge I have now.
I could have liquidated the CC (via intro % rate cash advance check) into my checking account and then capitalized my business account with those funds. Then I could pay startup costs from my business account right from the start.
I imagine I'd create a liability account for the principal CC "loan" and an expense account for the interest in my biz books. How would you handle this since the CC payments are being charged to me personally, but that debt was used to fund my business?
Thanks for your input!

Comments

  • MikegMikeg Member Posts: 364 ✭✭✭

    If expenses are paid outside the business, then debit expenses credit owners equity. If you contribute a liability to a business, then debit owner equity credit liability. Hope that helps

  • epitomaepitoma Member Posts: 12

    @Mikeg yes that makes perfect sense, thanks for the reply!

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