Entries would be made in the Acct payable section using the Purchase module with payments made thru Payment module. These are business invoices no matter how it was paid.

Set up a vendor for the Hydro Company and also for the Telephone Company and post them as a pay later using the invoice date of those bills. You would be debiting the expense account and the tax account.

Then go into your owner equity account or shareholder loan account and class that as bank (you do this by double clicking on the account name and then select the Tab that says 'Class' and that is where you select the class type of 'bank', you don't need to complete anything else)

Now go into the payment module and select the bank to be the owner equity acct or shareholder loan acct.

Use the date the owner actually paid this.

Then in the general journal entry you can make an entry using Source as the Chq Nbr 49 and the date is the date of chq, the comment is the owner's name, and the account nbrs would be to credit business bank account and debit Owner Eqity account or Shareholder Loan account.

The particular section of my workbook where this assignment is pertains to General Journal entries only. The other modules are introduced later in the studies, so the entry must only show the DR and CR entries for the GJ.

ok - then use the following:

Source is Hydro Company

Date is the date the owner paid it.

Comment would be To record Hydro Inv# dated Month/Year

Owner Equity/Shareholder Loan (CR) 168.00

Hydro expense (DR) 160.00

GST Paid (DR) 8.00

Source is Telephone Company

Date is the date the owner paid it.

Comment would be  To record Telephone Inv# dated Month/Year

Owner Equity/Shareholder Loan (CR) 193.20

Telephone expense (DR) 184.00

GST paid (DR) 9.20

The source is listed as shown since that is where you got the information from.

Next JE will be:

Source is Chq nbr

Comment is Owner's Name

Business chq acct: (CR) 361.20

Owner Equity/Shareholder Loan (DR) 361.20

In real practice one would not do this since it is not showing the expenses in the month it was incurred in.

Strange that the training manual would use the cash basis unless the company is a farming or fishing business, or those who are self-employed commission sales.

It is my understanding that there is only one transaction recorded for this particular problem, and for this assignment it is recorded via the General Journal; it must balance for DR/CR for the amount of $361.20. No invoice numbers are mentioned for the payment of business utility payments for the Hydro and Telephone; just their amounts and the amount of GST paid. The chart of accounts has an asset account for Bank - Chequing Acct; Expense accounts exist for both Hydro and Phone; GST paid exists; Owners Equity exists and Owner's Drawings. No additional accounts are added for this particular problem.

I am quite sure the proper entry for this is simple, but as I am am refreshing what I once knew via self-study, I don't have an instructor on hand to assist with occasional guidance. I have contacted several consultants, but the fee for four questions, most very basic, $50 and up.

The scenario again as noted in my first post is as follows:

Scenario:

The business owner paid her business hydro and telephone bills from her personal chequing account; she wrote cheque #49 for $361.20 to reimburse herself for these expenses. They hydro bill was $160 plus $8 GST, and the telephone bill was $184 plus $9.20 GST.

one journal entry assumes that the payment of the 2 bills, and reimbursement occurred

in the same month - because one journal entry can only have one date

in real life, you would create entries (probably not journal entries) for each transaction, using enter/pay bills

but for your exercise, you could create one entry using the info that Smithco provided above

So, to recap, you are saying that since we can only assume that she paid the bills, out of her personal account, on the date listed for the reimbursement, I do not make actual entries for the expenses, or the GST paid, but rather just for the amount reimbursed? There is not shareholder loan account in the chart of accounts given; there is however an Owner's Equity account.

So, the entry would be as follows with reference being given in the Source and Comments fields.

Bank chequing account (CR) 361.20

Owner's Equity (DR) 361.20

Yes that is correct, if you are under the assumption the question is only asking you to create a general journal for the reimbursement of money back to owner.

Smithco, thank you for your assistance with this question....much appreciated. As no invoices or specific dates of expense payments are noted in the exercise, yet reimbursement is the action taking place, I would agree that this is the only action that must be address for this.

Smithco: I would like to thank you for all of your input. I have been in contact with the instructor of the local college who works with the same workbook that the question I was seeking assistance came from. You were very right in your response above; there are three entries exactly as you have them with the exception of the equity account used...they have used the Owner's Drawings account for this set of entries. Your excellent input is much appreciated!

Wow - that's good to know. It all depends on how one reads the instruction - I know from experience that the way a question is worded can be confusing, one can overthink it too - something I have done many times myself.

Hello, I am currently working on this same case from the book. I think I found what transactions are supposed be done. (I guess it is only for schooling purposes because it is totally wrong to do accounting this way - mixing personal and business transactions)  In the accounts chart there is another account named "3150 M. Missoni (that's the name of the person), Drawings" and its class is "retained earnings" not "equity". So probably what they meant was:

transaction 1:

Dr Hydro expense          160.00

Dr GST5%                          8.00

Dr Telephone expense   184.00

Dr GST5%                          9.20

       Cr Drawings                         361.20

transaction 2:

Dr Drawings                      361.20

      Cr Chequing Account              361.20

what makes me think that this is what the authors meant is the following - later on in the same company there is a following case:

The owner M. Missoni paid from her company's chequing account dance lessons for her daughter. The authors also wrote "Use Drawings account". Then the transaction must be:

Dr Drawings

    Cr Chequing Account  

So that's why I think we are supposed to use the same account in the  transaction 1. What do you think? Are these transactions possible? I am new to Canadian accounting, back home such kind of transactions are not possible (well, they are possible but very unlikely and only with loan from the owner account plus accruing interest etc.), owners mixing personal and company's funds will end up with a solid fine from the tax authorities most probably.

Thank you in advance

oh, and also this Drawings account has Dr 900 beginning balance