Payroll - Bonus paid by credit card

[kara]

We purchased an item for a pastor valued at 860.05 using the church credit card. We are considering this as paying a bonus. I want to show it through the payroll module as a bonus to him but we did not cut a check rather used the church credit card. Our credit card is set up as a Bank Account. How do I show this transaction?

[JohnDMeyers]

You treat the credit card as a bank account??
(It probably would be better in the liability section)

That aside, here's how I would show everything.

Buy the thing for $860.05 on credit card:
CR 01-1220-000 credit card liability $860.05
DB 01-5450-000 expense account $860.05

Pay the credit card bill:
CR 01-1110-000 checking $860.05
DB 01-1220-000 credit card liability $860.05

Treat the purchase as a bonus:
(In Payroll, create a Pay Item: Bonus purchase)
Bonus Purchase - Manual Check
CR 01-5450-000 expense account $860.05
DB 01-5150-000 pastoral wages $860.05

[kara]

Well - we pay off the credit card every month....I have been doing the following:

To expense an item:
credit card account - credit
expense - debit

To pay off the card balance:
bank account - credit
credit card account - debit

Each pastor fills out a weekly expense report that must equal the amount charged on the card for that week. It is then signed off on and submitted. I input it as stated above and then pay the credit card in that amount - zeroing it out.

How do I fix this in changing the credit card to a liability account after it has been set up as an asset?

[JohnDMeyers]

Let's say your asset account is 01-1710-000 credit card asset, with a balance of -$500 (I'm assuming you have a negative balance - because a credit card is the "opposite" of an asset)

Create a liability account 01-2710-000 credit card (choose your own number)

If you have a negative balance in 01-1710-000, do this:
DB 01-1710-000 credit card asset $500
CR 01-2710-000 credit card $500

If you have a positive balance in 01-1710-000 do this:
CR 01-1710-000 credit card asset $500
DB 01-2710-000 credit card $500