Pay invoice from owners equity


How do i pay an invoice from the owners equity account. As we can no longer pay equity to cash on hand.
How would i deduct money from the owners equity account, to pay an invoice made out to an owner.
He wants the invoice deducted from his loan to the company.


You can create a journal entry where you debit Accounts payable, then select purchase invoice and credit the loan account which belongs to the owner.


Thank you. that helped and fixed my problem.

Next issue.
I loaned the company money. i entered it in the beginning as a purchaces invoice.
i would like to correct that, but as i cant do a journal entry. How do i do this?

  1. delete spent money. (bank amount goes up)
  2. Delete purchase invoice.
  3. Cannnot journal money from bank to equity account?


You can Receive Money in a bank account (a debit) and credit your equity account. This is the equivalent of a journal entry.

You referred in #1 to deleting spent money. Was that a typo? Did you mean to refer to deleting received money? From the company’s standpoint, the money you loaned was a receipt.

Also, I wonder why you characterize this as a loan? If you invested in the company, that would normally be handled simply as owner equity. Financially, the company still owes you money. If you are thinking to charge the company interest, that would not be looked on favorably by tax authorities or auditors. You cannot pay yourself interest.

All of my comments assume you are a sole owner/proprietor.


In the beginning i entered the amount that was a loan from me as a purchse invoice.