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FrankTMack
Jan 18, 2021 2:30 PM UTC
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accounting entries for a forgiven ppp loan for an s-corp?

Anyone know the correct accounting entries for a forgiven ppp loan for an s-corp?  Close out the liability (loan) and book to equity?  Thanks in advance for any assistance.

john-pero
john-peroAnswer
Jan 21, 2021 12:22 AM UTC

Yes, you got it. Per the revised rules om forgiveness, a sole proprietor or LLC simply records the forgiveness as non-taxable grant, but an S corporation must add the forgiven amount to company basis, which means equity in a nutshell.

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3 replies

john-pero
john-peroAnswer
Jan 21, 2021 12:22 AM UTC

Yes, you got it. Per the revised rules om forgiveness, a sole proprietor or LLC simply records the forgiveness as non-taxable grant, but an S corporation must add the forgiven amount to company basis, which means equity in a nutshell.

    fteeter
    May 14, 2021 7:47 PM UTC

    What is the equity account to credit for an S corp?  is it retained earnings or owners draw?

     

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