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Question
What is the S corps general ledger entry when it receives a distribution from an LLC of which it is a member? Debit the S corps bank account. And then credit what account? Thanks in advance for your answer.
Answer

Great question! If the S Corp has interest in an LLC, that investment should be recorded as a long-term asset on the S Corp’s balance sheet, i.e. “Investment in ABC LLC.”

Any distributions, contributions, or share of profits/losses should be run through that account. So to answer your question, you would debit cash and credit your long-term asset account.

No answer given yet!

Sarah York, EA

Sarah is an Enrolled Agent with the IRS and has 6 years of tax and accounting experience. She's an avid hiker, animal lover, and self-proclaimed chocolate connoisseur.

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