After playing around with the interface for a bit, I found that it's possible to create a new "Payment method" and a new "Deposit to" account when recording invoice payments. I'm not sure whether this is the best way to record these payments, but this looks like it should work. One downside is that this records the equity as a dollar amount rather than a percentage of equity and the dollar amount will change over time. It sounds like Quickbooks simply isn't suited for recording equity as a percentage, number of shares of stock, or anything other than a fixed dollar amount. My plan is to treat this entry as the cost basis for that equity and maintain a separate spreadsheet to keep track of my percentage ownership of the client's company. If anyone knows of a better way to do this in Quickbooks, please let me know. Here is what I did:
1. Open the invoice (Sales > Invoices > click an invoice in the list).
2. Click "Receive payment".
3. Click the drop-down list under "Payment method" and click "Add new".
4. Type a name for the payment method (e.g. "Company X Equity") and then click "Save".
5. Click the drop-down list under "Deposit to" and click "Add new".
6. For "Account Type" select "Other Current Assets".
7. For "Detail Type" select "Investments - Other".
8. Under "Name" type a name for the account (e.g. "Company X Equity Account").
9. Choose a starting date, enter an opening balance, and then click "Save and Close".
10. Under "Amount received" enter a dollar amount for the value of the equity received.
11. Click "Save and Close" to record the equity payment.
