Adding External Equity Investment

arshad935arshad935 Member Posts: 3

i want to ask that if an outsider want to invest in my company so in what account i will add the cash of that investor and how will it be balanaced.


  • MikegMikeg Member Posts: 689 ✭✭✭

    Going to depend on whether it is treated as debt or equity by the outside party. If debt, then set up a Loan Payable - "NAME". or if equity investment set up Equity Investment - "NAME". Either of these accounts can be set up under Accounting/Chart of Accounts. Go to liabilities if treated as debt or Equity if treated that way. Since the investor is contributing cash you would categorize the deposit to either one of those accounts depending on what you set up. If you are manually entering transactions then it would be a debit to the cash account and a credit to debt or equity.

    edited February 13, 2020
  • arshad935arshad935 Member Posts: 3

    Got it. Thank You

  • EmmaPEmmaP Administrator Posts: 562 admin
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