I got a c corp and I got personal loans for my business. Right now I have each loan setup as a long term liability notes payable., because this was a personal loan that I cashed and contributed to my business should it be the long term liability or show up as owners equity? If it is owners equity then how do I show payments for interest and for principle? Show them as owners distribution or as expenses?
This would not be equity. A C-Corp has stock and additional paid in capital. These remain the same unless additional stock is sold or additional paid in capital contribution is made. These are not paid back.
If you took out loans personally and then lent the company money to be paid back, then these would be stockholder loans (long term liability if repayment term is over one year). Since the original loan was probably from a bank and in your name as opposed to the corporations' name, you need to draw up a loan document between the company and yourself. Payments should be made to you directly. You, in turn, write a personal check to the lender.
You should check with your tax accountant on how to handle the interest paid on the loan. Usually, the C-Corp would issue you a 1099-INT at the end of the year for interest paid by the corporation to you. The interest is an expense. You will likely include the interest as income to you, but your accountant will likely treat this as an investment expense.
Third-party loans should be taken out in the Corporation's name and not in your name. If you personally borrow and then contribute the loan funds to the company's capital, you can be forced to withdraw taxable dividends later to pay the interest and principal on the personal loan.
It is better to make a loan to the company instead. This debt would be owed to you personally as a shareholder rather than to a thirty-party lender. Then you would receive taxable interest payments on the loan without double taxation because your corporation receives an offsetting interest expense deduction. You would also collect tax-free principal payments on the loan.