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BizIPEsq.
BizIPEsq., Attorney
Category: Business Law
Satisfied Customers: 996
Experience:  I am a business attorney. I represent individuals and companies with all business related matters.
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qHello, I just started working for a gentleman, who owns

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qHello,

I just started working for a gentleman, who owns 15 different companies, all of which have their own quickbooks company. I also handle his personal bills & banking, which is also set up as a quickbooks company. He often lends monies to the different companies, so right now he is owed 300k plus??? My problem stems from the fact that most of the transactions have been booked in his personal records as "additional capital" and payments received have been booked as "return on capital" , so I have no idea how much each company really owes.

My question is how should I book these loan transactions on his personal balance sheet? Can I just create loan accounts for each company as assets (like a/r acct) and post return payments against the balances?

BizIPEsq. :

Hello, I will be assisting you

BizIPEsq. :

Are these companies LLCs or corporations? Or a mixture?

Customer:

LLC

BizIPEsq. :

Generally speaking, you can do it in one of two ways. The money is is investing in the LLCs could count towards his capital accounts.

BizIPEsq. :

the other way as you noted would be to count such money as a loan to the company

Customer:

Right, so booked as an asset on the balance sheet : Loan to XXX $20.000" , correct?

BizIPEsq. :

if loan then yes. Person would then pay tax on the interest

BizIPEsq. :

BTW, there should be an interest associated with loans or they may not be considered loans

BizIPEsq. :

the interest these days is very low and not impactful

Customer:

so if left as "additional capital" in the equity the interest would not apply?

BizIPEsq. :

correct. Additional capital could mean a capital infusion into the member's capital account

Customer:

okay, then could I create several "additional capital sub-accounts" on his personal balance sheet to reflect the correct balances to each of these companies? Right now they are all in one and I have no idea who owes how much.

BizIPEsq. :

he should have a separate capital account with each company

Customer:

thank you! That makes so much more sense!

BizIPEsq. :

you are welcome

BizIPEsq. :

please rate my service

BizIPEsq. :

without your rating I do not get compensated for my workj

BizIPEsq. :

try again

Customer:

Thanks again

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