Migrated to http://wavelet.asia/customer-portal/2011/07/01/repayment-to-director-for-settlement-of-supplier-invoice/

Scenario:

1. Supplier invoiced company for RM 1,200.
   
2. The company paid the supplier RM 1,000.
3. The remainder of RM 200 was settled by the Director in cash. 
4. Company intends to pay back RM 200 to the Director.
   

How to recognize transactions 1, 2, 3 and 4?

Solution:

Transaction 1

• Create a credit note in the credit memo to record the amount of RM 1,200 owed to supplier.
  
• Please refer to Create Supplier Credit Memo.

	Debit	Credit
Inventory	1,200
Accounts Payable		1,200

Transaction 2

• Create a payment voucher to recognize a payment made to supplier for RM 1,000.
• Please see Create Payment Voucher.

	Debit	Credit
Accounts Payable	1,000
Cash / Bank		1,000

Transaction 3

• Create a debit note in the credit memo to show that the Director made a payment of RM 200 in cash.
• If a GL code does not exist for the Director account, you must create a GL Code. Please see Chart of Accounts. (GL Category > Current Liabilities - Other Payable)
  

	Debit	Credit
Accounts Payable	200
DirectorNameGL		200

Transaction 4

• To record a repayment of RM 200 to Director for the cash payment he/she made for the invoice.
  

	Debit	Credit
DirectorNameGL	200
Cash / Bank		200