Ask a Financial Software Question, Get an Answer ASAP!
Exact equity accounts would depend on whether the LLC is to be taxed as a partnership (in which case you must have separate equity accounts for each partner) or as a corporation (in which case you can have a common equity account).
The basic entry for a corporate entity is that you will increase equity account by $300 and for the 4 members that paid cash, the balancing transaction is the you have $300 increase in organizational expense.
There is no transaction that is separate for the person that paid with his credit card to pay the fees.
Sorry for the misstatement above, just ignore the part about "and for the 4 members that paid cash"....
So, a simple Journal entry...increase equity by $300, and increase organizational expense by $300.
we are setting up the company as partnership, which i created each member an equity account with a contributions and a distributions sub account
so will we be putting two credits, one for expense and one for the contributions accounts
i assumed to debit the expense and credit the contributions equity
For each partner increase their partner equity account by 60 and then increase the organizational expense by 60. Five transactions in all. All are the same.
yes, on the journal, i did 5 transactions as a credit to the equity accounts and 1 transaction as a debit to the expense account of the 300. Seemed to work.
ok then you got it.