Peachtree 2007 question.

  • Thread starter Paul Thomas, CPA
  • Start date

P

Paul Thomas, CPA

John Hastings said:
I've just bought peachtree pro 2007. My partner borrowed $17,000 to
start
a small business with. Where do I enter this information? I selected a
default business of computer services, and this has a traditional chart of
accounts for this type of business. Since it is a partnership. How do I
put in the money to get started? Does the 17k go under partners
contributions? and get balanced against long term liabilities? There
doesn't seem to be a start up capital account.


Setting up the books correctly is an important step that results in eons of
not having to deal with the initial errors you can make in putting an
accounting system together.

The cash contributed should result in a debit to the bank account and a
credit to partner's equity.

He shouldn't look at it as a loan, although he can take it out at some later
date, he'll not get interest on his contributions amount as he would if he
loaned the money to the business.

You may want to track the equity contributions, as well as withdrawals, per
partner, for basis purposes.
 
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P

Paul Thomas, CPA

John Hastings said:
The problem with that I think is that we spent a few thousand before the
bank account was opened. So there are no checks to track it, just
receipts.
So I was thinking...

17,000 partners contributions as an assett debit
17,000 long term liability

Well, the things you spent money on were either a start-up expense,
furniture and equipment, inventory, or some other type of asset account.

Expenses paid prior to opening would be one of the above, and shown as an
asset.

They'd still be a partners equity contribution (credit) entry.





then allocate 2,000 to various expense accounts such as rent paid, etc.
Since this was paid before the checking acct was set up w/ cash.
and 15,000 as a debit to the 'regular checking account' in peachtree.

Ok, so you don't debit cash, but you'll debit the asset the expense relates
to.

You need to get the various accounts set-up before entering any $ amounts.

Then journal entry in the opening balances, expenses, etc.



I'm probably thoroughly confused.

That's OK. See if there is a local college that has a Peachtree (or basic
accounting) class as part of their continuing education program.

It'll help in dozens of ways.
 
J

John Hastings

Hi,
I've just bought peachtree pro 2007. My partner borrowed $17,000 to start
a small business with. Where do I enter this information? I selected a
default business of computer services, and this has a traditional chart of
accounts for this type of business. Since it is a partnership. How do I
put in the money to get started? Does the 17k go under partners
contributions? and get balanced against long term liabilities? There
doesn't seem to be a start up capital account.
 
J

John Hastings

The problem with that I think is that we spent a few thousand before the
bank account was opened. So there are no checks to track it, just receipts.
So I was thinking...

17,000 partners contributions as an assett debit
17,000 long term liability
then allocate 2,000 to various expense accounts such as rent paid, etc.
Since this was paid before the checking acct was set up w/ cash.
and 15,000 as a debit to the 'regular checking account' in peachtree.
I'm probably thoroughly confused.
 
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H

HSalim

You do not have to pay by check for it to be considered a business expense.
You can record the receipt of cash as a capital contribution from the
partner and then use the cash to pay for rent etc or you can record simple
debit the expense/asset acount and credit partner's contribution

These beginning entries can be confusing. You should talk to an accountant.
Let him/her set up the initial entries for you.

HS
 

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