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• # 54761
• Sat 26 Feb 2011 09:53 PM

Say that I went out and bought some stationary (for £50) and office equipment (for £250)  for the business that I own, but I put it onto my own credit card.

The question is how do I post this into the books?

I can think of two opptions, though not sure if either is right.
1/
Stationary Dr £50
Office Equipment Dr £250
Capital Cr £300 

2/
Stationary Dr £50
Office Equipment Dr £250
Personal Loan Cr £300

and then at a later date
Personal Loan Dr £300 
Bank Cr £300

Can anyone give me any advice.
Thanks 

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• # 54762
• Sat 26 Feb 2011 10:58 PM

I would say that capital is the correct treatment since you are the owner, if you were the director, then it's common practice to use a director's loan account.

But in theory both are correct because they are both creating a creditor i.e. you and both journals would show that the business owes you money.

Edited at 26 Feb 2011 11:00 PM GMT

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• # 54765
• Sun 27 Feb 2011 02:20 PM

There is another option - set up a creditor/bank account as your credit card, debit each of the expense accounts and credit the creditor/credit card account then when the payment is made - credit the usual bank account and debit the creditor/credit card account.

Quickbooks has this as a function "enter credit card charges".


Geoff

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• # 54768
• Sun 27 Feb 2011 06:37 PM

I think what is missing from the original question is whether after buying stationary and equipment on his personal credit card the owner wishes to leave the funds in the business.

If he does then its seems reasonable to credit the capital account. If not then credit the drawings account, then debit it when the funds are repaid to the owner.

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