As we are starting a fresh business, we are funding the business through our personal account till the time our corporate bank account is open. We have properly maintained the payments done. We have followed by maintaining a receiving entry and updating it as and when Owner feeds the business. We are using capital accounts sub function “funds contributed”.
Additionally, we have read the guides and adjusted the “retained earnings” to “owners equity” for sole proprietorship clarity.
Our query is:
- Is the above way correct?
- How to pay back the owner once we have deposited the money for corporate account separately? Also will this be taxable if we return the money i.e. Should not appear as income.
- Expense claims are different than capital funds contributed and should not be used in this case, correct?
Thanking you for your support.