This topic contains 1 reply, has 2 voices, and was last updated by 
Crystalynn Shelton 10 months, 3 weeks ago.
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AshleePartner A added money into the savings account as it was payoff from a job…debited savings, credited Partner A’s equity.
Now a portion of that money is going to pay off Partner B’s credit card bill that was used on the job. I need to debit the Partner B’s credit card, and credit the savings account for the transaction, but how do I reflect that Partner A’s equity is also being lowered?Hi Ashlee!
So if I understood you correctly, Partner A was paid for a job and you increased his/her equity and the savings account accordingly which is correct. However, you also indicated that Partner B’s credit card was used on the job and a portion of the money that was received needs to go towards paying that credit card off. Where I’m confused is why would Partner A’s equity go down?
As far as the 2nd transaction that you need to record, you should transfer the money out of the savings account to make the payment to the credit card company. That would be the following entry:
Debit Credit Card Liability
Credit Savings AccountThere is no need to decrease the equity for Partner A unless the original journal entry was an overpayment.
I hope this helps.
All the Best-
Crystalynn Shelton
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