do your tenants sometimes move or pass away and do not collect back their security deposit
well then you need to know how to record gains from abandoned deposits
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sometimes tenants leave and nobody claims or requests their security deposit back
this is simply an unexpected gain to you the landlord you should record it
as an income type of account but not a normal income type of account
you see since it's not a gain that relates to your normal operations it should be in an
other income type of account that type of account will appear on the bottom of the profit and loss
after the income from normal operations so let's go ahead and put it on the list list
chart of accounts now we click account new but remember we don't want an income type
of account click the pull down we want other income other income and this explains that
this is income but not from normal ordinary operations click continue and you type in
gain from abandoned deposits you might want to put it in capital so i did that real quick off camera
save and close and now it's on the list way down below the income section is the other income
section now gains from abandoned deposits in order to acknowledge this you just make a journal entry
to remove the deposit and acknowledge the gain you credit gain on abandoned deposits and debit
the security deposit payable put the tenant's name on the same line as the security deposit payable
so quickbooks knows which specific tenants deposit you are gaining from for example
let's imagine on november 1 j jonah jameson our tenant who has a security deposit with us
has passed away nobody in the family comes to claim the security deposit you just make a journal
entry to remove the deposit and acknowledge the gain you credit gain on abandoned deposits and
debit the security deposit payable account you put the tenant's name on the same line as the security
deposit payable so quickbooks knows which specific tenants security deposit you are gaining from
and therefore should become zero in the security deposit report so very simple company
make general journal entry now the date we're imagining is november 1 of 2020
and this is how we do it you can hide the ribbon if you want to see a little more of the journal
the account that you credit is the new one we made gain on abandoned deposits
now we don't know how much the deposit is unless we open the security deposit report
if we click here you can see that j jonah jameson still has 500 dollars of security deposit with us
because in all of our previous videos these other deposits went down to zero and that's
why on the trial balance security deposits payable has only five hundred it's only j jonah jameson's
security deposit but after we record this journal entry security deposit payable will become
zero and gain on abandoned deposits will show up for the first time in the trial balance
as five hundred dollars so we credit the gain from abandoned security deposits 500
and the balancing 500 debit goes to security deposits payable and you must put j jonah jameson
on the same line now when we click save and close we've achieved both goals
if you look at the security deposit report you see that you recorded gaining from j jones and jameson
and therefore you do not owe that security deposit anymore and if you click trial balance you see
that the security deposits went down to zero we gave everybody back their security deposit
and if you scroll down we now have five hundred dollars gain on abandoned deposits
and if you click reports company and financial profit and loss standard a for all you can see
that the gain from the security deposit is here at the bottom under normal net income
because it is a gain it is income but it's not part of your normal operations
you