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How to show funds owed to LLC member

Hello - we are a multi-member LLC.  Unfortuantely, we were unable to pay all LLC members their monthly draw (due to unpaid invoices).  I would like to enter a transaction to show how much each member is owed so when funds become available I can enter a transaction to show they were paid for the unpaid draw. 

I have created 3 Equity accounts for each member (Equity, Member Name Contribution, Member Name Distribution).  Please advise what account I need to create and what entries I need to make so that our year end books look correct.  Thank you!

1 Comment
Level 15

How to show funds owed to LLC member

Unless your partnership agreement specifies a guaranteed payment for certain partners by name, there is no such thing as owing a monthly amount to a partner.

If you do have a guaranteed payment requirement, then  the entry would be a journal entry
debit guaranteed payment expense and credit guaranteed payment liability

Otherwise the amount a partner takes from the partnership is a draw on equity, they either take it or not, but it is not owed to them in the sense of it being a liability

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