How do I allocate a supplier payment paid for by a related entity?

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  • Updated 3 years ago
One of our suppliers were paid by our parent entity. I have raised a journal to create the loan to our parent, with the debit side being suspense for now. How do I now allocate the payment to the supplier so it moves from accounts payable without putting anything through the bank account?
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Posted 3 years ago

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Hi Jason

To correct this entry.

1. I would set up either a Petty Cash or Cash account in the Bank.

2. The journal entry you mention I would have one side to the Loan account with the parent company and the other to the new cash account.

3. I would then pay the supper invoice to the cash account.

This will set up your loan account pay the supplier and you new cash account will be nil.

You can then use this cash account should you have further bills paid this way.

I hope this helps you



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Great Lynda, that works for me, thanks!