Discussion:SP Bank Loan now assumed by S-Corp - S/H Loan?

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Or if SP is Special Purpose Entity changing to S corporation, there would be no entries.}} Or if SP is Special Purpose Entity changing to S corporation, there would be no entries.}}
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 +{{ForumReplyPost|UserID=Dude7707|Date=31 July 2009|Text=SP - Sole Proprietor which is now a shareholder in the newly formed S-Corp.}}

Revision as of 15:48, 31 July 2009

Discussion Forum Index --> Accounting Questions --> SP Bank Loan now assumed by S-Corp - S/H Loan?

Dude7707 (talk|edits) said:

29 July 2009
SP initially took out $10k signed by him. Now SP is changing to S-corp and want's 10k to be assumed by S-corp since a promissory note will be issued. What is correct recording on S-Corp Books? 
 Dr.  S/H - Contributions

   Cr.  Loan from S/H

Future payments from S-Corp paying down bank loans will be recorded as: 

 Dr  Loan from S/H
 Dr  Interest Expense
   Cr  Cash

Is this correct.....

MWPXYZ (talk|edits) said:

31 July 2009
SP? If SP is the stockholder I guess debit stockholder loan and credit bank loan. Payments include debits to loan account and interest expense.

Or if SP is Special Purpose Entity changing to S corporation, there would be no entries.

Dude7707 (talk|edits) said:

31 July 2009
SP - Sole Proprietor which is now a shareholder in the newly formed S-Corp.
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