I am a single-member S-Corp LLC as of 1/1/2020. I utilized QuickBooks 2013 until this month. I decided to upgrade to QuickBooks 2021 and chose NOT to import my 2013 file into the new version for 2020. While the income and expense were correct in my 2013 version, I'm not sure draws and equity are shown properly in it. So decided to create a new file in QuickBooks 2021 beginning 1/1/20. All data is accurate in my QuickBooks 2021 file and is 100% reconciled.
I have 5 banking accounts:
Cash
Checking
Savings
Paypal
Venmo
I used the ending balance on 12/31/19 as the Opening Balance on the new QB21 file. These balances were put in an "Open Balance Equity" account. In reading on the "Open Balance Equity" account, I found that I needed to create a Journal Entry. I did and I debited the "OBE" account, and credited the "Common Stock" equity account.
Was this correct? And if so, what was the purpose of doing that?
Do funds ever move in and/or out of the "Common Stock" account, and if so, what would be an example of that happening?
I also have 3 equity accounts:
Common Stock
Retained Earnings
Shareholder Distributions
How do those 3 accounts play into this?
How would funds end up in any of these accounts?
Saw another post that maybe creating these equity accounts?
Shareholder Capital
-Shareholder Contributions
-Shareholder Distributions
Should I create the above accounts and move the entry from "Common Stock" to "Shareholder Contributions"?
Thanks in advance!
