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Recording injection of capital into the company


#1

As a first time user I apologise if this is something unworthy of this forum but how do I show an injection of Equity into the company for operating capital?


#2

It depends on the type of business structure you are using to operate your business. If it is an incorporated company the injection of equity would be as Issued Capital. If your business is operated as a partnership or sole trader, create Capital Accounts with a sub account named “Funds Contributed” to record the injection of equity.


#3

Any amount that you put into the company needs to be shown as a payable due to you or an amount in a capital account; stock issued, capital for John Smith, etc. A capital account is a way of tracking monies moving through the company that are just funding activites to help determine basis of ownership etc…