Hi there

I need some advise on how to correct my staff loan account. Our company can buy equipment from a supplier on 30 days credit. We also allow some of our employees to purchase equipment for personal use on this account, provided that the costs will be deducted from their salaries.

First I captured the invoice from the supplier and booked it to my "tools and equipment" account.
Next I deducted the amount (excl. VAT) from the employee's salary as a staff loan, and book it the staff loan account.

Now on the staff loan account, I have a credit of x amount but not a debit of x amount.

I can think of two ways to fix it:
1. Create a journal entry to debit the "staff loans" account and credit the "tools and equipment" account.
2. Loan the same amount to the employee again, thereby creating the debit on my "staff loan" account, and simply reduce the employee's salary on the next payrun.

Please could you advise which way to go?