Equity

Owners Drawings

Sometimes business owners withdraw funds from their company. These drawings may be equity drawings or a temporary drawing which may be booked against an existing directors loan. To book an equity drawing:

1. Select Add > Journal.
2. Set the contact to be the person drawing the funds. Add an appropriate comment.
3. Debit Equity: Owners Drawings.
4. Credit Asset: Bank Account XYZ.

Issue Shares in a Company

Your organisation may be a type that can issue stock, equity, or even units in a trust. To represent this you will need entries which use the Equity type of account. In the following example, we are capturing an owner investing $1 of equity in the company for stock/shares giving the company:

1. Set up an Account called Equity: Issued Capital or similar.
2. Enter a sales transaction for $1 using the contact as the shareholder – The account you select will be Equity: Issued Capital.
3. Apply a payment (if you receive one) or email the unpaid sale with any supporting documents for the issue of the share.
4. When payment is received, apply it to the transaction using the pay option.
5. Repeat this process for any other shares issued.

You can now repeat this approach as you issue more capital (shares and the like) OR opposite entries may be required as you re-purchase equity from shareholders through buybacks or other methods. Given that there are several forms of equity, it is important to consult your advisor.