Hello. I have a similar question.  For a SMLLC that needs to close out the Owner Draws - there is not enough R/E to satisfy the offset, however, there is enough in both R/E and Paid in Capital combined.  For example, Owner Draws = -$100k.  R/E = $45k. PIC = $59k.  Would the journal entry reduce the R/E to $0 and the remaining $55k reduce the PIC account?