How to record Capital Stock
Lexi
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.
0
Comments
@Lexi,
You can create an account under the Equity section
@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.
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.
@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.
It would be your best move.