Balance sheet
lgarside
Registered Posts: 122 Dedicated contributor 🦉
Hello I was wondering if someone could explain what happens to the money a share holder has invested.
If for example they have put 80,000 into a failing business to bank role it, this will show on the balance sheet as a liability, but does the shareholder just get repaid once there are some profits? If so what are the accounting entries for this?
If for example they have put 80,000 into a failing business to bank role it, this will show on the balance sheet as a liability, but does the shareholder just get repaid once there are some profits? If so what are the accounting entries for this?
0
Comments
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BS
01. When you put the money
DR: Bank
CR: Directors loan
02. When you draw the money
other way around0 -
What Emthi said is only true if the shareholder is also a director.0
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Depends whether the funds are being lent or whether it is a purchase of shares/loan notes/debentures..0
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If shares, whether there are sufficient funds on winding up/dissolution to pay back the shares in full.0
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