USA Recording of Wages and Opening Balance Equity

[Tyson]

Hello,

Our company has an official incorporation date of July 1, 2015. Taxes on wages payed up until July 24, 2015 were deposited by our payroll servicer under the EIN of the previous entity, a sole proprietorship. Bookkeeping for the new company started on July 1, 2015. Should the wages up until July 24 be recorded in the books of the sole proprietorship or the corporation? If under the sole proprietorship, then for the corporation how should I account for paying those wages? Should I just change the effective starting date of the corporation to July 24? Can I do that? How can I do that?

The owner wants the Opening Balance Equity to be a loan from him to the corporation, as he will have to pay taxes on this amount (net income from the closed sole proprietorship). Will this balance stay the same even though wages were payed under the previous entity's EIN after incorporation and acquisition of a new EIN?

 

[kirby]

Follow the legal form of the transactions, if you told the govt that wages thru 7/24 were paid by the proprietorship then record that in the proprietorship. Separate issue: if the corp had contracted with the proprietorship to pay wages but corp would reimburse proprietorship for wages after July first then proprietorship needs to bill a management fee to corp. Get it?

 

[Tyson]

I get it. Thank you!

I would like to record these wages as wages paid under the corporation for record-keeping purposes, but then the number on our books would not match the amount the IRS has on file for the corporation at the end of the year. I guess I will need to track these separately for this year.