I am new to Quickbooks and accounting, and would like to know how to properly set up equity accounts for an S-Corp.
- Should capital stock be subaccounted per shareholder? I.e. is there a need to keep track of capital stock per shareholder? Ownership interest is already specified in organizational meeting minutes and corporate records, is there a need to keep track of it in accounting database as well?
- How to account for additional capital contributions during the lifetime of the corporation? Should I set up separate account for that? Should it be subaccounted per shareholder? (Assuming that all subsequent capital contributions will be made in proportion to original stock ownership).
- How to account for owner draws (distributions)? Just debit Retained Earnings or to create a separate account for that purpose (with subaccounts per shareholders)? If there is a separate account for distributions, how to deal with ever-accumulating negative balance on it?
Thanks in advance!