Accounting & Bookkeeping & Small Business Forum

[mak101]

I have my business and I set up my home loan payment directly from my business checking account. How do I record this entry? Someone told me to debit diveden paid account. Is this OK?

[Richard Noot]

personal expenses should not be paid thru a business account

[mak101]

Yes, I do understand that. Thats why someone suggested to debit in Dividend Paid account. Since it is going from business checking account, I have to record somewhere in book.

[stasia2003]

mak101 wrote: I have my business and I set up my home loan payment directly from my business checking account. How do I record this entry? Someone told me to debit diveden paid account. Is this OK?

Why not setup a personal checking/savings account that's with the same bank as your business account? That way, you can just transfer funds when you need them to the personal account? You cannot use the dividends account to track your mortgage payment.

If you haven't made a mortgage payment yet out of the account...DON'T. Just go and setup an additional account for your mps.

[irsfixer]

mak101 wrote: Yes, I do understand that. Thats why someone suggested to debit in Dividend Paid account. Since it is going from business checking account, I have to record somewhere in book.

Of course personal expenses should not be paid thru the business, but as to how to deal with what actually happened, it is important to know what form of organization your business is.

[mak101]

Mine is S corp and I am the only one owner. I dont want to take my payment as an expense. This is my personal withdrawl, since company is making profit, this withdrawl (or any other personal) can be shown as dividend paid, thats what somebody tld me. I need expert opinion on that or any other idea?

[mak101]

In other words, I would like to know how would I withdraw (record in book) my profit ?