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How to record repayment of Capital (Owner's Equity)?
How to record repayment of Capital (Owner's Equity)?
Harshal Katre avatar
Written by Harshal Katre
Updated over a week ago

The ordinary meaning of a repayment of capital is the return to a holder of capital (whether in the form of shares or other investments) of the whole or part of the amount that represented their capital investment.

How to record capital repayment?

Firstly, to record capital repayment user has to create 2 accounts- Capital account and Bank account (In ProfitBooks, these two accounts are already created in default).

To create account, refer to articles mentioned at the end of the article on "How to create new accounts?"

Now go to Accounting > Journal entries, click on Add New record.

Fill all the details like date, project etc. and debit the capital account and credit the bank account/cash account with the amount of repayment.

Refer the below image for reference:

You can also add the description in description box.
Click on save and its done.

For drawings from capital account similar entry are passed.

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