Learn how to record capital investments in QuickBooks Desktop for Mac.
Capital investment is the procurement of money and/or the acquisition of long-term assets such as real estate, vehicles, and machinery to further a business’s goals and objectives.
Create an equity account
An equity account tracks money invested in or taken out of the business by owners or shareholders.
Add an equity account in your chart of accounts.
- Select the Chart of Accounts icon on the homepage.
- Select the + icon on the lower left of the screen.
- In the New Account window, choose Equity from the Type field.
- Provide a name for the account in the Name field then select OK.
You can create additional equity accounts in your chart of accounts and use them to track the following:
- Owner's equity: is the owner’s investment in the business minus the owner’s draws or withdrawals plus the net income.
- Owner's draw: is when a business owner takes funds out of their business for personal use.
- Capital investment: is the procurement of money and/or the acquisition of long-term assets such as real estate, vehicles, and machinery.
- Capital stock: is the amount of common and preferred shares that a company is authorized to issue.
Note: If you have your own company, we recommend that you add at least one equity account to track your personal investment and owner's draws.
Record a capital investment
- Go to Banking then Make Deposits.
- If QuickBooks displays the Payments to Deposit window, do one of the following:
- Select the payments you want to deposit along with your investment check.
- Select Cancel to deposit the investment check alone.
- In the Make Deposits window, choose the bank account where you're depositing the money.
- In the detail area, enter the name of the person you received the money from and the amount of the investment.
- In the “From account” list, choose the right equity account.
FAQs
Owners Contributions/Investments and Draws
- Click on + New then select Bank deposit.
- From the Account drop-down menu, select the bank account you're depositing the money into.
- Enter the Date you deposited the money.
- In the Add funds to this deposit section, enter the name of the investor in the Received from field.
How to Record an Investment in QuickBooks?
- Step 1: Set Up Your Investment Account. ...
- Step 2: Add Your Investment. ...
- Step 3: Record the Initial Investment. ...
- Step 4: Record the Change in Value of Your Investment. ...
- Step 5: Record Any Income or Expenses Related to Your Investment.
Accounting for Capital Investments
The cost of the asset should be recorded in the company's accounting records. This can include the purchase price of the asset as well as any additional costs related to the purchase such as installation or transportation costs.
How do I record capital expenses in QuickBooks? ›
To record CapEx in QuickBooks:
- Go to the Balance Sheet report.
- Scroll down to find the Property, Plant & Equipment section.
- Click the drop-down arrow next to the PPE account where you want to record the CapEx.
- Select Enter Opening Balance.
- In the Opening Balance window: Select the date the asset was placed in service.
Accounting for Contributed Capital
When an investor pays a company for shares of its stock, the typical journal entry is for the company to debit the cash account for the amount of cash received and to credit the contributed capital account.
Where do I record capital in QuickBooks? ›
To register the Owner's Capital Investment in QuickBooks, users can avail of the Make Deposit feature, which is present in the banking section to add the particular investment to the concerned owner's equity account.
How do I account for investments in QuickBooks? ›
Investment accounts
- Click the Gear icon on the top menu.
- Select Chart of Accounts.
- Tick the New button to create a new account.
- In the Account Type dropdown menu, choose an account type.
- Select the detail type that best fits the types of transactions you want to track in the Detail Type account.
The Bottom Line
Invested capital is the total amount of money a company raises through the sale of shares and the issuance of bonds; a mix of both equity and debt financing. A company can have either all equity financing, all debt financing, or a combination of both.
What is the journal entry for capital investment? ›
The amount invested in the business whether in the means of cash or kind by the proprietor or owner of the business is called capital. The capital account will be credited and the cash or assets brought in will be debited.
Is capital investment an expense? ›
CapEx can tell you how much a company invests in existing and new fixed assets to maintain or grow its business. Put differently, CapEx is any type of expense that a company capitalizes or shows on its balance sheet as an investment rather than on its income statement as an expenditure.
How to record capital assets
- Total the cost. When recording the value of a capital asset, you need to consider more than just the cost paid for it. ...
- Determine its category. ...
- Record the invoice. ...
- Making the payment. ...
- Calculate depreciation. ...
- Selling the asset.
A capital expense is a payment made by a business to acquire, create or enhance the business's assets. Examples of capital expenses include buying office furniture or a company car, investing in franchise rights, putting a new roof on a building, or adding new electric wiring.
How do you record capital on a balance sheet? ›
Capital is present on the Liabilities side of the Balance Sheet of a company. The reason is that a company is an artificial person, and it owes the Capital amount to its owners and investors. Share Capital is present under the head Shareholders Fund.
What is an example of a capital expense? ›
Capital expenditures are long-term investments, meaning the assets purchased have a useful life of one year or more. Types of capital expenditures can include purchases of property, equipment, land, computers, furniture, and software.
Where do capital contributions go on cash flow statement? ›
An owner's capital contribution to a business represents an investment for that individual. But from the point of view of the business, the contribution is financing, so it will appear on the cash-flow statement as a financing cash flow.
What goes under contributed capital on balance sheet? ›
Contributed capital (also known as the paid-in capital) is the total value of a company's equity purchased by investors directly from a company. In other words, it indicates the total amount of money that the shareholders paid to a company to acquire their stakes in it.
How do you account for owner contribution? ›
You want to create an account in your equity section called Owner's Contributions. Any money you contribute to the business that you don't expect to be repaid should be booked to this account. You should also have an Owner's Draws account in the equity section to record any cash you withdraw from the business.
How do I record in kind contributions in QuickBooks? ›
Record in-kind donations
- Select + New.
- Select Sales receipt.
- In the Customer field, enter the donor's name. ...
- In the Sales Receipt date field, enter the date of the donation.
- From the Deposit to ▼ dropdown menu, select the In-Kind Clearing bank account you created.
