I can do the latest step using manual journal entry. that's no problem. it'll just be ugly way to do things around withholding tax. I'm trying to get it done under what's supposed to be by inputting onto Supplier Invoice
Maybe There's something that i'm missing because the entry generated by Supplier Invoice operation are not what I would have expected it would be /w Withholding Tax component
Ok. So the following setup is what I have done so far :
1. Set a new Tax in Setup -> Tax named "Withholding Tax" with its
Sales GL Account to "Withholding Tax Payable"
Purchasing GL Account also to the same "Withholding Tax Payable"
Default Rate is 2%
Well, our company just concern with Withholding for Purchase. so that's the only subject of interest for now
2. Create a new Item Tax Types that make sure "airconditioning service charge" have this tax component.
In fact it's the only tax component for this item
It is a Service type item, so its :
Sales Account is set to "Sales"
COGS Account is set to "Repairs and Maintenance"
3. Create John as Suppliers and make sure he is also in Tax Group with Withholding Tax checked. Not that it matters a lot
Account Payable Account is set to "Account Payable"
Purchase Account is set to "Repairs and Maintenance"
4. Create a direct Supplier Invoice for a $100 worth of invoice.
The Price Before Tax Line is set to $100. Hence there's a $2 Withhold Tax on this transaction
The created Journal Entry would be ( from creating Supplier Invoice operation in FA )
Dr Withholding Tax Payable $2 ---> I would expect this to be Cr, like what you thought it would have been
Dr Repairs and Maintenance $100
Cr John Payable $102