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khaida
Level 1

Accounting for a personal loan with that will be used to fund my S Corp business

Hello,

I started a business in 2017 that has been established as an S Corp.  I recently took out a loan in my name, but the purpose of the loan was to fund my business.  Now that I have received the loan proceeds in my personal account, I plan to use the entirety of the loan proceeds to fund my S Corp  What is the best way to account for the funds that I will be loaning to my business?  Additionally, I will need to use my S corp business to repay myself when loan payments are due.

 

What is the most efficient way to account for a personal loan used to fund a business account?

1 Comment 1
Rustler
Level 15

Accounting for a personal loan with that will be used to fund my S Corp business

Treat yourself as the banker, set up a liability account, deposit the funds and use that liability account as the source account for the deposit.

Pay the loan down

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