How to record Capital Stock

LexiLexi Member Posts: 3

Hello, my CPA wants me to add a journal entry for debiting distributions to myself and crediting capital stock. I recently changed my business from an LLC to an S-corp. In the chart of accounts, I do not have any options for Capital Stock. I'm curious where to add Capital Stock under the Chart of Accounts so I can add this journal entry correctly.

Comments

  • MikegMikeg Member Posts: 995 ✭✭✭

    @Lexi,
    You can create an account under the Equity section

  • LexiLexi Member Posts: 3

    @Mikeg Thank you for your comment! However, when I expressed this option to my CPA they stated it would not go under either of the Equity subcategories (Business Owner Contribution and Drawing or Retained Earnings: Profit). So I'm at a loss of where to add it. I'm assuming it's an asset and should go under subcategory of Property, Plant, Equipment. They also stated that when I changed my business profile from LLC to S-corp, an option of Capital Stock should have shown up in the Chart of Accounts, but it did not; hence why I'm reaching out to the community. Pretty frustrated at this point haha.

  • MikegMikeg Member Posts: 995 ✭✭✭

    You can add to the business owner contribution and drawing. It shows up in the correct place on the balance sheet. The Owners drawing is a pre populated description used based on the entity that was created at the time you opened you Wave account. Had you opened a corporation Capital stock is in that section.

    edited March 19, 2022
  • LexiLexi Member Posts: 3

    @Mikeg You're amazing!!! Thank you so much! Will definitely keep you in mind if I decide to move away from my current CPA firm.

  • MikegMikeg Member Posts: 995 ✭✭✭

    It would be your best move. :)

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