AccountingBLOCK

mztman · 04-10-2008, 01:31 PM

Can an owner of an Incorporated business, where other owners are involved take out owner draws as a Officer Loan, to pay his personal taxes. If he can how would I ledger this?

Charly · 04-10-2008, 01:32 PM

whether he can or not it depends on the agreement among owners

I would record it as a regular loan since you mentioned it is a loan not a withdrawal :

Dr. officer loan (this account is same nature as salary account)
Cr. Cash/Bank account

if it was just a withdrawal I would record it as follows:

if propriotership / partnership

Dr. withdrawal/owner x
Cr. Cash/Bank account

if SAL

Dr. Retained Earnings
cr. Cah/Bank

in both company legal forms the Dr. side is closed in the capital / or owner's equity account at the end of the fiscal year.

04-10-2008, 01:31 PM	#1 (permalink)
mztman Status: n00b Join Date: Apr 2008 Posts: 10 Credits: 220	Can Owner Draw Money? Can an owner of an Incorporated business, where other owners are involved take out owner draws as a Officer Loan, to pay his personal taxes. If he can how would I ledger this?

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04-10-2008, 01:32 PM	#2 (permalink)
Charly Status: Getting feet wet Join Date: Mar 2008 Posts: 33 Credits: 460	whether he can or not it depends on the agreement among owners I would record it as a regular loan since you mentioned it is a loan not a withdrawal : Dr. officer loan (this account is same nature as salary account) Cr. Cash/Bank account if it was just a withdrawal I would record it as follows: if propriotership / partnership Dr. withdrawal/owner x Cr. Cash/Bank account if SAL Dr. Retained Earnings cr. Cah/Bank in both company legal forms the Dr. side is closed in the capital / or owner's equity account at the end of the fiscal year.

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