Journal Entry for Remuneration to the Designated Partners in LLP
This query is : Resolved
12 February 2024
We have two designated partners in our LLP. we want to pay regular monthly remuneration to the partners (this is not profit sharing). How do I record this on journal entry? we are using Zoho books.
I tried to categorize the transaction on banking tab as money out->owner's drawing->drawing (journal entry is owners drawing dr and bank account cr) but it reduces the share capital (equity) in balance sheet. since the remuneration paid is more than the initial capital, currently share capital is showing in negative which I think is not correct.
Can someone please help me resolve the issue? the objective is to pay monthly remuneration to the working partner and deduct it under profit and loss as per section 40 (B).
Thank you
I tried to categorize the transaction on banking tab as money out->owner's drawing->drawing (journal entry is owners drawing dr and bank account cr) but it reduces the share capital (equity) in balance sheet. since the remuneration paid is more than the initial capital, currently share capital is showing in negative which I think is not correct.
Can someone please help me resolve the issue? the objective is to pay monthly remuneration to the working partner and deduct it under profit and loss as per section 40 (B).
Thank you
CA R SEETHARAMAN
(Expert)
13 February 2024
Partners remuneration dr
To bank account cr
Debit to expenses account.
To bank account cr
Debit to expenses account.
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