Working with Quickbooks in regards to Real Estate/ tenant security deposits?

Question

I want to record my tenant's security deposit in a "other liabilites account" without it affecting my "equity" account, which I found after playing with it had occured. Also I don't want it to look like the tenant has a "credit" so I can't record it as a "transaction". I have contacted Quickbooks and they told me it couldn't be done- but that is crazy there must be landlords out there using this! If anyone can please HELP, tell me ASAP!!!

Answer 1

you need to set up two accounts

1- Trust Account (actual money in the account) - Bank Account (separate from operating account)
2- Trust account payable (your liabilities on the security deposits)- Liabilities

These two accounts should always be equal

When writing Checks and Deposits, do so out of the Trust account and mark it as affecting The Trust Account Payables account.

If doing journal entries you must debit one account and credit the other depending on whether you are taking money in or letting money out.

This will keep your equity equal because as you increase your bank account you are also increasing your liabilities.

Answer 2

You should have set it up for real estate rather than general business. In any event, recording it as liability is the right way and it WILL affect your equity since it is debt diluting net worth.


Your equity account should be initial equity plus additional paid in capital plus common stock...3 seperate entries...