USA Journal Entries for Line of Credit

[Bad Medicine]

I understand how to account for a normal loan, with notes payable, because that essentially puts a bunch of cash into an account which can then be spent and you really only have a few journal entries for the loan.

But what happens when it is essentially an open line of credit ? Say, for example, the owner of a new corporation pays for some of the corporations initial expenses out of his/her own pocket, keeps receipts, and wants to treat these transactions as a kind of line of credit with a maximum amount. Once the initial month or two is over and the corporation has its own accounts, the owner can then formalize all of the expenses into a final total that is due as a kind of note, but how do you account for the first month or two in the books, a cash account like a checking account that is really a kind of representation of the owner's wallet ? The part I'm having trouble understanding is how these initial transactions are entered into the corporation's books.

Edit, maybe it would be a specific account as a liability and transactions would come straight from that for assets purchased and expenses incurred as if it was cash ?

 

[Bad Medicine]

I ended up just creating an accounts payable and billing everything to it, then closed it out with a cash credit.