How to record a payment made on a company vehicle.
The owner of the company paid off the company vehicle from his own account. I was told that I need to record this as a shareholder contribution but I’m not really sure how to do that. Thank you for the help.
Just to clarify, the vehicle belongs to the company and is was paid for with a loan? How it was initially recorded will determine the journal entry you need to make. If it was originally booked as an asset (debit to vehicles/cars) and a liability (credit to a payable account, like loans payable), you’ll need to enter the following:
Debit Loans Payable (or appropriate liability account)
Credit Owner’s Contribution (or appropriate equity account)
When the company makes the payments (vs the owner), the credit would be to cash vs the owner’s contribution account.
Let me know if I can help with anything else!