[GNC] Buying with PayPal - how do I split the transaction?

[list+gnucash at jdlh.com]

Hello, David:

I have the same kind of transactions in my small business bookkeeping as 
you describe here. My responses are interleaved below.

On 2022-12-09 12:00, Dr. David Kirkby wrote:
> I have the following accounts, and am buying something in GBP.
>
> Assets -> Accounts  Receivable -> GBP
> Assets -> Bank account
> Assets -> PayPal -> GBP
> Expenses -> Utilities -> Internet
> Liabilities -> Accounts Payable -> GBP
>
> I paid Google £15 for using some cloud storage (OneDrive) using PayPal. So
> PayPal took the money from the bank account and paid Google.
>
> *If I were NOT using PayPal, this is the process I would go through.*
>
> *Under Business -> Vendor -> New Bill*
> Create a bill and post that to these accounts
> *Expense Account:* Expenses -> Utilities -> Internet
> *Post to Account: * Liabilities -> Accounts Payable -> GBP
>
> *Under Business -> Vendor -> Process Payment*
> Process the payment
> *, using these accounts*
> *Post to*: Liabilities -> Accounts Payable -> GBP
> *Transfer Account:* Assets ->  Bank account
>
> Am I doing that all correctly done, if not using PayPal ?

I do not use the Business -> Vendor features to handle such 
transactions, even for business expenses. If the funds are leaving my 
possession as part of the payment, I do not see a reason to involve 
Accounts Payable. So I follow this process:

Create a simple transaction with these accounts
*Asset Account:* Assets ->  Bank account
*Other Account:* Expenses -> Utilities -> Internet

> ...how can I modify the process so the  account* Assets ->
> PayPal -> GBP* account gets used?
If I am using Paypal, which keeps a zero balance, then as soon as I pay 
for something with Paypal, Paypal funds that amount by charging my bank 
account (or credit card, sometimes). I follow a process with two simple 
transactions:

*Asset Account:* Assets ->  Paypal account -> GBP
*Expense Account:* Expenses -> Utilities -> Internet

*Asset Account:* Assets ->  Paypal account -> GBP
*Other Account:* Assets ->  Bank account

This means that the expense is recorded in the Expense Account, the 
Paypal ledger has two matching transactions to reconcile against my 
Paypal statement, and the Bank account ledger has a single transaction 
to reconcile against the Bank statement.

Hope this helps!

       —Jim DeLaHunt