To record the purchase of non-controlling interest (NCI) shares in QuickBooks, you’ll need to create a journal entry to account for the transaction. The purchase of NCI shares represents an investment in a subsidiary or an entity where the investor does not have control. Here’s how to do it:
Step 1: Access the “Journal Entry” Option:
- Go to the QuickBooks homepage.
- Click on the “Create” button (usually represented by a plus “+” sign) at the top of the screen.
- Under the “Other” column, select “Journal Entry.”
Step 2: Enter the Journal Entry Details:
In the “Journal Entry” window, provide the following information:
- Date: Specify the date of the purchase of the non-controlling interest shares.
- Debit Account: Debit an appropriate asset account to represent the value of the NCI shares acquired. This account typically represents the investment in the subsidiary or entity.
- Credit Account: Credit the bank account or the account from which the payment for the NCI shares is made.
- You can add a memo to provide additional information about the transaction, including details about the subsidiary or entity in which the NCI shares were acquired and any relevant notes.
Step 3: Save the Journal Entry:
Review the journal entry details to ensure accuracy and save the journal entry.
Step 4: Document and Maintain Records:
Keep proper documentation related to the purchase of NCI shares, including share purchase agreements, stock certificates, payment confirmations, and any relevant paperwork.
Step 5: Reconcile Your Accounts:
After recording the purchase of NCI shares, reconcile your accounts in QuickBooks with your actual financial statements to ensure accuracy.
Step 6: Consult with Your Accountant:
The specific accounts and accounting treatment for NCI shares can vary based on your business’s accounting standards and practices. Consulting with your accountant or a financial advisor is advisable to ensure that you are correctly accounting for the transaction and addressing any specific tax or compliance requirements.
Please note that the specific accounts and accounting treatment may vary depending on the nature of the NCI acquisition and your company’s accounting practices. Consulting with a professional accountant or financial advisor is essential to ensure compliance with accounting standards and accurate accounting for non-controlling interest shares.
QuickBooks, a potent financial management tool for small businesses, is commonly employed alongside a dedicated bookkeeper for small business owners.
