Other Questions

This should normally be done as follows:

1.  Set up an Equity account called something like 'Owner's Equity'.

2.  Create a sub-account under 'Owner's Equity' and call it something like 'Owner's Capital'.

3.  Create a 2nd sub-account under 'Owner's Equity' and call it something like 'Owner's Draw'.

You would never make your entries to the top-level account, as this is simply your account 'heading', and all totals from sub-accounts underneath it will roll up into this.  Keeping track of the Owner's Capital or contributions and the Owner's Draws in separate accounts allows you to see the balance of each, at any given time, but the net total will always be in your top level account.

Whenever you make a posting to indicate that the owner has put in his own cash or spent his own money on business expenses, the Owner's Capital account will be on the other side - always a Debit.

Whenever money goes out of the company to the owner, whether it be by cash withdrawal, or company money spent on personal expenses, you will post to Owner's Draw account on the other side - always a Credit.

These terms are usually used in a small enterprise or sole proprietorship where the owner's income is simply his profit for the year.  If this is an incorporated company, you may want to replace the word 'Owner' in these accounts with 'Shareholder'.

Hope that helps!