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    Jeannette181's Avatar
    Jeannette181 Posts: 2, Reputation: 1
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    #1

    Sep 14, 2012, 10:15 AM
    Contra expense account
    I have a member of our llc that borrowed a lot of money on personal credit cards to start and keep the business. He declared bankruptcy. All his debt was erased. The company had been paying the credit cards but also could not pay any longer, hence the personal bankruptcy. How do I write off these liabilities on our books.
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #2

    Sep 14, 2012, 04:27 PM
    You will have to reverse the remaining liabilities out of the various accounts they relate to. Without knowing how the investment was recorded in the first place we cannot offer a more detailed explanation
    Jeannette181's Avatar
    Jeannette181 Posts: 2, Reputation: 1
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    #3

    Sep 18, 2012, 10:20 AM
    They were recorded as credit card charges under current liabilities and paid monthly for several years until the bankruptcy.
    Thank you.
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #4

    Sep 18, 2012, 03:54 PM
    So you want to create an adjustment for prior year transactions

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