My Wife and myself are join holders of a loan account. Where she is the primary loan account holder.
I have registered the loan account in Manager in my wifes accounts under liabilities by creating an account under chart of accounts > Balance Sheet Account > Group > Liabilities and entered the opening balance of the year.
Say 10,000.
However some installments of the loan were paid off directly from my bank account.
How do i record the same in Manager. e.g I paid 500 directly into the loan account.
My wifes accounts also have a capital account where I record monthly contributions towards house hold expenses credited by me.
I tried using a journal entry with manager by crediting 500 to the loan account and debiting 500 from a capital account.
However that reduces the capital account amount, where as it should increas the capital account amount.
You have not provided enough information to answer your question. Let’s start with some basic information:
Are you accounting for both your wife’s and your finances within the same Manager business? Or do you have one Manager business for your wife and one for yourself?
Is your bank account (from which you made loan payments) also set up in Manager?
How are you crediting your monthly contributions to household expenses? Where is the money coming from?
Where did the money to make the loan payment actually come from? (It cannot have come from a capital account, because capital accounts do not hold actual funds. They are only records of how much is invested in or owed by the accounting entity. Funds to pay a loan must have come from a cash or bank account.)
Are you accounting for both your wife’s and your finances within the same Manager business? Or do you have one Manager business for your wife and one for yourself?
– I have a separate manager account for myself and one for my wife.
Is your bank account (from which you made loan payments) also set up in Manager?
– The loan account is registered under my wifes business as shes the primiary loan holder. However since its a joint loan. I have paid directly to the loan account from my bank account.
How are you crediting your monthly contributions to household expenses? Where is the money coming from?
– I trasfer money from my bank to my wifes bank and record the transfer in my wifes business as capital account and show the funds contributed as a house hold expenses as they are not taxed to my wife if they are for house hold expenses.
Where did the money to make the loan payment actually come from? (It cannot have come from a capital account, because capital accounts do not hold actual funds. They are only records of how much is invested in or owed by the accounting entity. Funds to pay a loan must have come from a cash or bank account.) - I paid the money from my bank, however the loan is registered in my wifes manager business. So in order to balance the loan amount I had to use a capital account. Which reduces her loan amount and in turn shows that i have invested more capital into her business.
That was not my question. I asked if you were using separate businesses. Accounts refer to either server/cloud user accounts or accounts within the chart of accounts of a business.
That is also not what I asked. I asked if your bank account is set up in Manager.
Again, not what I asked. I asked how you are crediting the money. That is, what type of transaction are you using?
From an accounting perspective, that may be exactly what you did. But without the answers to the previous questions, it is impossible to know. If you made a loan payment on behalf of a business owned by your wife, without any money passing through a cash or bank account in that business, your wife should record that via an expense claim. See https://www.manager.io/guides/6898.
Also, if your wife’s “business” is truly a business rather than a method of tracking personal finances, the contributions to household expenses you make should not be recorded at all. Those are not business expenses.