I know I have been doing this for years but was reading some posts and thought I would do it another way.
So it is a company with 1 shareholder who draws money out through the year so come the end of year I want to declare it as shareholders salary.($2000)
I have set up an account shareholders current account under BS liabilities
and have the current accounts in the equity section
So I did a pay slip and put it to the P&L expense account shareholders salary(Debit)
then I made payment from the bank account to the employee clearing account.
(which I like cause it took it out of the bank account and put in expense account)
now I am not sure what to do to record the salary on the balance sheet I know I use journals
but what is the credit and debit are we using the BS account and the capital account in the equity section. I thought the whole point was to not use capital accounts in equity section instead just use the BS one or am I missing why we are using a payslip
So my balance sheet looks like this now but it does not look right