Removing Shareholder Loan from Balance Sheet

kednelly

hey guys,
i started a small company with a few friends and we all put in some cash, hence we have equity. I recorded the initial cash into our bank account however it is still sitting as a Liability and we dont see a true picture of the company position - we do not expect to get this initial cash paid back rather we will take drawings per our % equity if we ever make a profit (damn COVID!).
How can i remove initial equity investment (shareholders loan) from the balance sheet without paying it back to the shareholders?
Thanks & cheers
Kristian

Barsin

Hey there @kednelly

First off, let me sincerely apologize that your business was affected by the Covid-19 pandemic. Know that our team is here to help you through this tough time!

With regards to the cash that you put into your company. First I would have setup separate equity accounts under each friend:

Friend equity 1
Friend equity 2
Friend equity 3

Then in your transactions page you'll want to create an income transaction for the money that they input into the company. Select the account for that transaction to be what account it landed into (for example business checking or cash on hand). Then you'll want to categorize the transactions for the friend it pertains to (for example Friend equity 1 for $1000 into business checking).

You'll also want to do the same for your expense transactions or withdrawals. Hope this helps!

kednelly

Hi Barsin,
thanks for the kind words and support!

I finally managed to follow your instructions (lack of time not lack of clarity!) and it is fantastic, exactly what i was looking for. Really appreciate the help!

Cheers
Kristian

Barsin

Glad I could help @kednelly