New to QBO and thanks for this great community which has been so helpful. I've reviewed multiple threads here and seen different answers and therefore hoping someone can simply clarify the following scenario:
Two member LLC (Partnership):
Member #1: Joe 93%
Member #2: Schmoe 7%
Both made capital contributions upon forming the LLC. Since then, Joe has made multiple additional capital contributions. Schmoe only made the initial capital contribution and never any additional.
Eventually, Joe will make draws for the additional contributions that he's made.
QBO connected to the bank and see the transfers from the two members.
What are the equity accounts that we need to create so that I can categorize the transfers?
This is what I'm assuming I need to have in the charts of accounts:
Patent equity accounts are for summing purposes only and do not get posted to (if you use a 4th parent account for each member)
The three EQUAL LEVEL equity accounts, and only 3 for each member are
Annually on first day oc fiscal year you close out Draw and Contribution to the othe Equity account.
Your patent accounts will keep a running total that you can eventually balance to and this imbalance has no effect on pass through of profit/loss unless the operating agreement specifies.
A multi member LLC can, if op agreement species, receive loans from members and pay deductible interest to same so you could, since you plan on returning funds, treat this extra as loaned money but you should to clarify it as a loan pay regular interest