Contributing assets (GST)

[airline]

If an owner of a business purchases an asset with their own personal cash, then contributes it to the business, is the GST included in the general journal entry?

[nbalakers24]

i think gst is only for those 4 journals

[andrew4443]

I had the biggest fight with my accounting teacher over this, he seems to think that you need to include GST in the transaction. This is what you supposedly have to do

Just say the owner contributes a computer worth 10,000 (plus 1000 GST) you would:
Debit Computer 10,000
Debit GST Clearing 1000
Credit Capital 11,000

I think this is wrong because it wasnt the actual business who paid GST on the asset, which gets even more complicated if the owner contributes the asset like three years after he bought it (i.e. purchased it in 2006 then contributed it in 2009)

Great if someone could clarify this

[Flaming_Arrow]

GST is only recorded in the general journal incase of a correcting entry or an opening entry to double entry

[GoodGuys]

GST is only recorded in the general journal incase of a correcting entry or an opening entry to double entry

thats right.