We have a credit at the CRA of $44,000. This was posted to our "Corporate Tax Payable account, and caused it to sit in a positive balance on the credit side of the chart of accounts (is this correct?)
Also, my company received authorization form the CRA to use that credit and apply it to October and November Source Deductions.
I have a couple questions:
October source deductions were originally paid out of the bank:
DB-Accounts Payable, CR-Bank
Then I reversed this payment to use the Corp Tax Credit
DB-Bank, CR-Corp Tax.
By doing this, I noticed the Corp Tax account increased...is this correct?
Regarding November Deductions, I created a payment invoice so currently there is a debit to CPP, EI and Emp Tax, CR-Accounts Payable.
Is there a better way to pay these source deductions from the Corp Tax account directly? Rather than pay from the bank and reverse it like I did for October?
Thanks in advance for your help!