Paul Thomas, CPA
John Hastings said:I've just bought peachtree pro 2007. My partner borrowed $17,000 to
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.