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Thread: Company Debts paid by Shareholder

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    Company Debts paid by Shareholder

    Hi All,

    So when a Shareholder sells a personal asset, and uses the funds to settle company debts (in cash), how do I record the transaction(s)?

    Can I simply enter a petty cash receipt of the total amount of debts paid, using the shareholder's loan account, and from there post petty cash payments to the relevant creditors?

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    Yes. In the end the trade creditor has been debited and the shareholder credited.

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