Partners 1& 2 put £5000 into a personal account as the business account was not open, started to purchase items for the business. Currently these figures are showing as capital investment in the partner equity account.
The partnership agreement reads:-
The initial capital shall be in the form of a loan of £xxx from 1&2 to the partnership and the partnership shall use their best endeavours to repay this as quickly as possible.
The business is now closed, nothing has been repaid and there are no funds in the bank.
Should this be showing as equity or a loan within the liabilites