The LLC failed in 2016 and did not repay the loan, or
effectively defaulted. I need to make sure I make the right journal entries.
In the LLC I made the following entries:
I debited the Loan
Account $56k
I credited Member Investments account $56k
For the S-corp I made the following entries:
I debited the loan account $56k
I credited the expense account "Bad Debt" the
$56k.
Does that sound right? From what I understand the $56k should
show up as income for the LLC and then show up as a loss or expense for the
S-Corp. Am I doing this right?
