and now we will learn how to refund money to tenants that are moving out if you have
any questions about this topic you can leave them in the comment section below and I'll do my best
to help you and of course if you feel the video helped you I hope you will click like and don't
forget to subscribe to get updates on new videos that come out all the time there's good news and
bad news regarding the transaction when you pay a tenant for the money you owe them when they
move out the good news is that it's very simple to refund money to a tenant moving out your write a
check the same way that we learned you include the tenant desk that both the payee and as the
job just like the way you saw it earlier in the course the only thing to note is that the account
in the lower-left field is the accounts receivable account that the money's coming from so if you're
paying them back the security deposit you would choose the security deposit account if you were
paying them back on earned rent you would choose the unearned rent account and so on so here's an
example on January 31 Garrett Gary and 7ji moves out first we'll make his January invoice then
we'll write him a check for the remainder of his deposit so first we have to make an invoice and
the invoice we're going to make is for Gary and of course the date is far in the future here the date
is January 31 of 2020 now here is the invoice now this invoice is for January's rent so the invoice
which will be applied to January's rent will go into unearned rental income because you're
billing him for the Nohr monthly rent because he did stay during the month of January so you
would put the normal monthly rent and we know that Gary's rent was well if we forget we could
always look here go down to Gary gary's rent was i think yeah eight hundred a month okay so there
you go amount eight hundred there you go and then we click Save and close that's it now all we have
to do is write him a refund check for his security deposit we can look at the security deposit report
and see that the remaining security deposit owed to Gary there's only six hundred dollars because
of this invoice that we had printed and given to him regarding the fridge so all we have to do is
open the check window bring the date forward to January 31 of 2020 and of course we have
to choose Gary as the payee and as the job now we're not going to put billable okay now okay
now we didn't put billable that's okay there were nothing there but what we have the do you
see is choose an account now the account we're going to choose is security deposits payable and
the amount that we're going to put is six hundred dollars because that's the amount so it's coming
from it's going into security deposits payable specifically for Gary six hundred now this is
the cheque that you could put in the memo this is your remaining security deposit and then of
course you can print him the report to show him why so we click Save and close and now you can
see that wheew Gary zero security deposit because we gave him a check on January 31 and this is the
actual check number do we owe him any unearned rent well if we look at the report called rent
balances we can see if we look for Gary down at Gary green steam his unearned rent balance
is zero because the January 31 invoice cancels out the January first payment now here's the bad
news if you owe the tenant both the deposit and the unearned rent you have to write two checks
one for the unearned rent refund and one for the security deposit refund sorry folks for example
on January 31 Harry in h8 moves out now do not make his January invoice why let's just imagine
the apartment was deemed a health hazard and law forbids earning rental income and Harry must go
therefore we're not going to make him an invoice we're not going to acknowledge that we earned and
were not going to charge him instead we must write him two checks one for the unearned rent and the
other for the deposit so again we opened the write a checks window and we make it January 31 of 2020
and both the payee and the customer job is Harry Houdini now the amount has to be nine hundred but
I just want to show you why there are going to be some people out there that are going to try
to write him one check for eighteen hundred and they're going to put nine hundred on one row and
they're going to put nine hundred on the other row and they're going to choose Harry Houdini for
both rows and they're going to put the security deposit on one row and they're going to put the
unearned income rent on the other now all of you who are trying this you are logically correct and
it should work but it doesn't it doesn't because if you try this you get a message that says you
cannot use more than one AR or AP account in the same transaction so I'm very very sorry let's
allow this first one to be the security deposit refund so we'll change this to 900 and we'll
simply write him another check let's get rid of this row as well be careful so this check for 900
will decrease security deposits payable as well as the balance of Harry in that particular account so
we click we write the check print whatever save and close and now when we open up the security
deposits we see Harry no longer has a security deposit with us because we gave him a check on
January 31 you might also notice by the way if you open the trial balance security deposits payable
is now zero and it's now zero because we gave back everybody's deposit in the last couple of videos
so we now have to write him a second check for the unearned rent and you can see if you open up the
rent balance the other receivables account you can see that this shows just what they offer regular
rent we still owe him nine hundred dollars here so let's write him a check and again this time it's
the same Harry Houdini in both places here and here but okay and the money amount unfortunately
for the second cheque is nine hundred dollars and this time it's coming out of unearned rent honored
you