Starting up (newbie question)

geebeegeebee Member Posts: 3

Hello I am new to Wave and to accounting. Please pardon my ignorance if this is obvious or already answered previously.

  1. I created an LLC in November (let's call it XYZ LLC). This is a single-member LLC. I set up a bank account for this LLC.
  2. I transferred $500 from my personal checking account to the LLC checking account.

I have two questions.

  1. how do I create entry for the $500 initial capital investment in Wave?
  2. When I created the LLC, I paid around $350 from my personal checking account to register the LLC, rent web site space, etc. How do I "pay myself" from the business?

If it matters, this LLC is for freelancing/consulting services. I will not receive the first consulting payments until late January or early February.

Thank you in advance!
GB

Comments

  • JudeRoseJudeRose Member Posts: 20

    Hello @geebee,
    I would enter a journal for these

    1. debit LLC bank account 500, credit owner investment 500
    2. debit P&L expenses $350 credit owner investment $350

    you could then transfer the money back from the business to cover the 350, leaving $150 in the account

    Hope that helps
    Chris

  • geebeegeebee Member Posts: 3

    Thank you @JudeRose. This helps. I have a couple of other newbie questions on how to actually implement these in Wave.

    1. debit LLC bank account 500, credit owner investment 500

    For this, do I "link" the LLC bank account and debit that? Or use one of Wave's accounts in chart of accounts?

    If I link the LLC bank account with Wave, then then the balance in that account will be downloaded from the bank account and show $500. Then if I debit that account with another account in Wave, the bank balance and the wave balance will be out of sync. Or am I missing something basic?

    1. debit P&L expenses $350 credit owner investment $350

    When I transfer the $350 from my LLC to myself, the owner investment account should go down (I.e. debit), is that correct?

    Once both of these transactions are done, my balance sheet should read as $150 in owner investment, and zero in all other wave accounts, correct?

    Thanks
    Gunjan

  • Ryan_WRyan_W Administrator Posts: 461 admin

    Just to chime in here, Wave's recently made it simpler to account for personal transactions posted to your business. The full details are here if you want to check it out. That said, @geebee what you've described in your second post looks good to me!

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