How do I represent my boss interest?

[Farmer]

we just started a new corporation. And the head of the corporation has been using his personal money to pay for some operational expenses. He also intend to give some of his personal assets like cars to run the corporation. My problem is how do I represent his interest in the company. can consider the expenses he made on behalf of the company as some of his investment. please a show me in journal entry form

 

[raeka]

This situation is similar to mine, I'm a small business owner and have paid (still paying) so many business expenses with my personal money/credit cards.

First of all, the new corporation needs to have money in the bank. I know this sounds silly because at the end the money would be just circling around, but this needs to be in the accounting entries and reported to the tax office at the end of financial year.

Journal Entry format would be:
Debit expense (say, stationeries, or staff amenities, car trip for business)
Credit Accounts Payable (which is the owner)

Then at the end of the month (or you can do it every two-three months), pay this owner through Accounts Payable, journal entry format would be:
Debit Accounts Payable
Credit Bank (cash)

With the cars, there are some methods you can choose:
Method 1 - Cents per kilometre

Your car expenses claim is based on a set rate for each business kilometre you travel and you can claim a maximum of 5,000 kilometres under this method. If you travel more than 5,000 kilometres the claim must be limited to 5,000 or you need to use an alternative method of claim.
You do not need written evidence but you need to be able to demonstrate that you have incurred the expense. Diary records will suffice.

Method 2 - 12% of original value

Your car expenses claim is based on 12% of the original value of your car. Luxury car limits apply.
Your car must have (or would have) travelled more than 5,000 business kilometres in the income year.

Method 3 – One-third of actual car expenses

You claim one-third of your car's expenses.
Your car must have (or would have) travelled more than 5,000 business kilometres in the income year.
You need written evidence of fuel and oil costs and for all other expenses for the car.

Method 4 - Logbook

Your car expenses claim is based on the business use percentage of each car expense which is determined by a log book that must have been kept for a minimum 12 week period. This log book must be updated every 5 years.
You need odometer readings for the start and end of the period that you owned or leased the car.
You need to detail all the kilometres you have travelled for the log book period.
You can claim all expenses that relate to the operation of the car and you will need to keep receipts to justify your claim.