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Lee Daniel


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Introducing Assets
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Hi, The Director of the company I work for wants to introduce some of the computers into the Balance Sheet,   the company has not paid for any these as they are owned and paid for by the director last year, What is the journal entry I need to enter on Sage, any help appreciated.

 

Regards

Jayne 



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gbm


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Dr Fixed asset additions
Cr Directors loan account

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Regards,
Nick

Website: www.gbmaccounts.co.uk
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Factsheet | Starting a Business

 
Lee Daniel


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Hi Nick, thanks for reply how is it cleared from the directors loan account, I assume it cant stay on there forever ?

Regards
Lee

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MarkS


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Hi Lee

Liabilty can stay on the directors loan until the companys reimburses the director for the value of the asset they introduced.

There is no need for the liability on the directors loan to be cleared

Regards

MarkS



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Mark Stewart CA

http://stewartaccounting.co.uk/

Providing accounting, bookkeeping, payroll and tax services to small and medium sized businesses across Central Scotland and beyond.
gbm


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Mark is right, it effectively creates a liability for the company - i.e. the company owes the director. It is then up to the company as to when they pay it out.

In some situations, directors run up large credit balances where they introduce cash to get a business off the ground. If the business fails, the directors will not get their money back. I'm not saying that's the case here though!


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Regards,
Nick

Website: www.gbmaccounts.co.uk
Twitter

Factsheet | Starting a Business

 
Lee Daniel


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Hi, Thanks for all your help, Regards Lee.

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