I’ve just started a Children’s Mascot company. For this I’ve ‘loaned’ my company as it were the money I’ve used to buy the Mascots. I created a new loan account and transferred the money I’ve loaned out of there into the PayPal account (I used this for all purchases) so the loan account is in negative balance the correct amount.
I recorded the purchases of the Mascots and Categorised them as Stock [Asset] as they are assets. I would expect my balances to end up as £0 because while I’m in debt the amount the value of the mascots as assets cancels this out. However My profit is balancing out to and my money owed which I would expect to be the loan amount.
Have I gone around the loan wrong, put the suits in the wrong Category? Any help would be much appreciated!
Thanks in advance,
Aidan