S corp equity account help - single shareholder

I have a single shareholder s-corp. I'm struggling with how to properly set up my equity accounts. The shareholder issued 10,000 shares @ $1 to himself. Nominal $1 value each.

I understand I should have a capital stock account. APIC and distributions. APIC and distributions should be for each shareholder but does the capital stock should be as well??

-Capital Stock

- Shareholder 1 Equity 

Sub - Additional Paid in Capital

Sub - Distributions

- Shareholder 2 Equity 

Sub - Additional Paid in Capital

Sub - Distributions

If the shareholder also started the company with $25K -- should that be considered a loan? Should we add a contribution account to the shareholder equity account?

Any help would be appreciated. Thank you

Answer

You stated there is only 1 shareholder, so you don't need a structure for 2. The difference between the $10k and the $25k is the additional paid in capital.

The program will "close" Net Income to Retained Earnings for you. On the first date of the new fiscal year, once all tax form adjustments are entered into the QB file, you would Close Distributions to Shareholder Equity, and Retained Earnings to Shareholder Equity. I don't even bother to use that, for a single Shareholder entity, since RE is all theirs. In that case, I close Distributions to RE:

Shareholder Contributions

Shareholder Distributions

RE


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