[Regroberts1]

My client formed a c corporation. His original investment was equipment worth 2,400. I credited a capital investment account for this transaction.

When he registered with the secretary of state, he committed to purchasing 1000 shares of common stock. He never purchased the stock out of his own money,
Instead he transferred the 1000 from the corporations operations (revenues earned) to a to a company savings account.

He is the sole shareholder. Can he do this? If so, how do you show this on the books when this money is actually revenues earned? How is the capital stock recorded on the books if the monies are not independent of earnings.

[paraclete]

My client formed a c corporation. His original investment was equipment worth 2,400. I credited a capital investment account for this transaction.

When he registered with the secretary of state, he committed to purchasing 1000 shares of common stock. He never purchased the stock out of his own money,
instead he transferred the 1000 from the corporations operations (revenues earned) to a to a company savings account.

He is the sole shareholder. Can he do this? If so, how do you show this on the books when this money is actually revenues earned? How is the capital stock recorded on the books if the monies are not independent of earnings.

I expect that what he has actually done is paid himself a dividend, this would need a minute to be recorded, declaring the dividend and issuing the shares. I'm unsure what you mean by a company savings account, this transaction would need to be recorded in two stages but I don't see how you transfer money from revenue to a bank account unless you record an expense and then bank the cheque back into the companies funds sounds very irregular