How Input Personal Loan and Pay back?

One_Auto

Hi, I'm new to Wave and not the best at bookkeeping and require help!
I have a couple of questions-
1) How would I input items I have purchased for the business with my own personal money.
2) How would I pay my self back for the items I purchased.
Many Thanks

Chris

Mikeg

One_Auto,
To record purchases made on behalf of the business with your personal funds, record via journal entry. (Accounting/Transactions/Click on More). Debit the type of expense and credit owners draw. Record any checks written to yourself as an owners draw as well. It just has the opposite effect.

One_Auto

Thanks for the help,
As of yet, I have not paid my self back, I assume for now I will only input into the income(Loan) the amount I have spent when I pay my self back I input into the expense?
Or would I put it down as a bill for now until paid back?
Thanks

Mikeg

Transactions with the owner are neither income or expense. The Owners account (loan or equity) is a balance sheet account. Follow the process I mentioned to record amounts spent by you personally and when you pay yourself back. There is no need for a bill.

One_Auto

Thanks

One_Auto

> @Mikeg said:
> One_Auto,
> To record purchases made on behalf of the business with your personal funds, record via journal entry. (Accounting/Transactions/Click on More). Debit the type of expense and credit owners draw. Record any checks written to yourself as an owners draw as well. It just has the opposite effect.

Hi sorry bringing this up again, I couldn't get my head around it!

A Couple of we questions on this!

Why use Journal and not just add an expense to the transaction page for Drawings?

I wasn't understanding the above post, why would I debit and credit (Journal),
Should I have two Accounts setup, Business and personal?

Thanks

Mikeg

@One_Auto,
You can use the transaction page and enter add income or add expense instead of a journal entry. My preference would be use the transaction items for amounts that actually went through the business cash account and journal entries for anything outside the business. So for example, you paid 50 for office supplies from your personal account.
Debit - Office Supplies 50
Credit Owners Equity 50
Done via Journal entry
Next - The business cuts you a check for 100
On the transaction page, add expense, complete items, select correct account that it came from, categorize as Owners Draw.
My assumption in the response is that you do not have Wave connected to your bank. Hence the journal entries. If you did, then you would see the amounts (100 example) already on the transaction page. However, amounts paid outside the business need to be recorded via journal entry.

One_Auto

Would I have to create a new account/profile(personal bank) to use Journal?
Journal Expense- Business Account
Journal Income- Personal

Mikeg

Owners draw is an account that comes standard in the chart of accounts when you created your Wave account.

One_Auto

So I only needed to withdraw to the owners drawings Account?
I do not have to do anything else?

Mikeg

That is correct. Although I would use Owner Equity. Both are present in the standard chart of accounts. Amounts that either you put in or pay for on behalf of the business can be categorized as Owner Equity