[GNC] accounting for business payment of paid labor

[Eric Hammond]

Subject: accounting for business payment of direct labor

I have received a partial answer for this previously, but I am not sure how to complete it:

I work on computers, mostly I do the work, but sometimes contract out.
All income is banked for bills/parts/supplies/services.
Example: journal for Job 20230211.1 has: 
Process:
1 Assets:Jobs:2023:0211.WIP      $500.00
2 Liabilities:Direct Labor                               $120.00
3 Assets:Stock                                                $100.00
4 Liabilities:Direct Labor                               $180.00

5 Finished Goods                           $500.00
6 Assets:Jobs:2023:0211.WIP                      $500.00

Billing:
7 Assets Receivables:                   $500.00
8 Sales:Jobs                                                     $500.00

Payment goes into the bank account

IF the labor is someone I hire, I pay his invoice, and the $500 leaves the bank
 
Liabilities:Direct Labor                 $500.00
Liabilities:Payables                                          $500.00
 
Liabilities:Payables                        $500.00
Assets:Bank                                                      $500.00

Normal, clean, easy...
 
But if the labor is me, the money stays in the bank, and the liability is unresolved.
One suggestion to clear the liability is:

Liabilities:Direct Labor                 $500.00
Equity:Owners Contribution                         $500.00

What reduces the effects of the Equity:Owners Contribution?
The cash does get spent on rent, parts, bills, etc, but the $500 (or other) keep increasing the equity in net worth, and other, reports.
Obviously, I am missing something. I appreciate any comments / help

Thank you for any help!