if company A buys office supplies for both companies on the same bill
say 100$ for company A, and 200$ for company B

company A GJ
db 100.00  5700 os        (not required if supplies only bought for company B)
db   5.00  2315 gst paid  (not required if supplies only bought for company B)
db 210.00  3104 interco B (would be the full amount, if supplies only bought for company B)
cr 315.00  1065 bank

company B GJ
db 200.00  5700 os    
db  10.00  2315 gst paid
cr 210.00  2234 interco A

now company B owes company A, 210.00
====================================
company B GJ
db 210.00  2234 interco A
cr 210.00  1010 bank

and company A records the payment
=================================
company A GJ
db 210.00  1065 bank
cr 210.00  3104 interco B

============================
as to your second point
  I am not sure where the initial payment was made from.  It may have been included in another transaction.
  I cannot see this specific amount coming out of the Bank in company A.    
  I do see where the payment from company B comes into company A's bank.

what was the method of payment when the supplies were purchased ?
bank debit card ? cash ? cheque ? credit card ?

if the payment is c/c, the first GJ would be
company A GJ
db 100.00  5700 os        (not required if supplies only bought for company B)
db   5.00  2315 gst paid  (not required if supplies only bought for company B)
db 210.00  3104 interco B (would be the full amount, if supplies only bought for company B)
cr 315.00  2xxx credit card payable

Roger L said:

now company B owes company B, 210.00

Sorry to be picky but Roger, did you mean

now company B owes company A, 210.00?

The exact journal entry would depend on whether the companies are related and have prepared a (GST25?).  If so there's no GST on intercompany transactions:

2nd GJ entry:

3104  inter-co: B Dr. 576.91 549.44

5700 o/s                                          Cr. 549.44

2315 GST Paid                              Cr. 27.47

Or if the entire purchase invoice is for Company B's purchase:

1st GJ entry:

5700 o/s   3104 Co B    Dr. 549.44

2315 GST Paid         Dr. 27.47

           1065 Bank                             Cr. 576.91

Otherwise, you've purchased office supplies as their agent, that they'll enter on their books.  Company A entry is just cash out and intercompany.

Company A

1st GJ entry:

5700 o/s                     Dr. 549.44

2315 GST Paid         Dr. 27.47

          1065 Bank                             Cr. 576.91

2nd GJ entry:

3104  inter-co: B      Dr. 576.91

5700 o/s                                          Cr. 549.44

2315 GST Paid                              Cr. 27.47

You could set up a liked item code for inter-company office supplies to use in payable invoices, or use a recurring transaction in the G/L,

Whether you keep track of the inter-company transactions using the Accounts Payable system or just journal entries, it will help if you have your inter-company accounts reconcilable.

mirasong said:

the boss used his personal credit card to purchase office supplies for both companies, and I found the payment that was made to him.

If you are paying any part of the Boss' credit card from the company, set it up as a credit card that your company uses, record invoices and payments the same way you would if you had an actual separate company credit card.

Even though you won't be paying *all* the amounts on that card, you could set up reconciliation.

A GST25 is often filled out to simplify inter-company transactions - the gist is that in some situations where one entity owns multiple companies, or one company owns the other, they don't pay / charge each other GST.  You don't have to give a copy to the CRA, but you do have to fill it out and keep it on file.

First get the 'outside' vendor transaction recorded properly, then work on getting the amounts transferred around between the companies.