and now we will learn how to record receiving rent with the security deposit
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this will give a separate check for the security deposit and then give another check for the first
one or two months rent usually we get one check from the tenant that covers both the deposit and
the first month's rent here's situation 1 two separate checks we will record the check for
the rent normally the way that we learned and we would even record the check for the deposit
normally except you must choose the security deposit account at the moment you record the
payment so here's an example let's imagine on January 1 of 2020 Gary Greenstein who's already
on the tenant list moves into apartment 7g and let's imagine his monthly rent is $800 he gave
you two checks on January 1 check one nine eight three four eight hundred this was specifically for
the security deposit then he gave you on the same day check one nine eight four four January's rent
and they were both $800 checks so let's take a look at how we would record this we opened the
payments window just like we did before and of course we're going to put the date we're
imagining it's January 1 of 2020 and of course the new tenant that we already put on the list
is Gary Greenstein and he gave us check number one nine eight three and it specifically said in
the memo for January rent so that check for eight hundred dollars is January rent so that's normal
which means we must leave the unearned rental income receivable account here because we did
not earn January's rent on January 1 we will soon so that's a separate eight hundred dollar check
save and new click ok now for the other check the check for the deposit it's still January one and
it's still Gary Greenstein and it's a different check number he actually gave check number one
nine eight four and check number one nine eight four was four eight hundred dollars but it is
not unearned rent check number one nine eight four is specifically for the security deposit
so we will instead choose security deposits payable now you can put in the memo security
deposit for Gary Greenstein now when we click Save and close and click OK you can see on the
trial balance security deposit payable shows up for the first time as eight hundred dollars and
if you look at the specific security deposit report you see only Gary Greenstein nobody
else now this situation is probably the one you would expect you receive one check in total for
both the security deposit as well as the first one or two months rent if that's the case you
must enter this same check twice the deposit amount goes into the security deposit account
and the remainder goes into the normal unearned rent account it's very very simple so here's an
example on January 1 2020 Harry Houdini already on the tenant list by the way moves into apartment 8h
and let's say his monthly rent is nine hundred he gave you one check on January 1 check number
six six one one for $1,800 and this was for both the security deposit and the January rent again
you must enter this same check twice the deposit amount goes into the security deposit account and
the remainder goes into the normal unearned rent account let's take a look so we click payment and
luckily it remembers that we're on January 1 of 2020 and the check amount is 1800 push tab and of
course the tenant is the new one Harry Houdini in 8h now the first check will be for the normal rent
or the first entry will be for the normal rent so we will leave unearned rental income and we
will put check number six six one one and then you can put half check for rent or anything in
the memo that helps you now again be careful we're imagining that you're depositing this on the same
day so you're not using the undeposited feature and we're pretending so the payment amount is
not correct even though the checks total was 1,800 over here we have to enter it twice we have to put
nine hundred here so I made a mistake a minute ago only put nine hundred because only nine hundred is
unearned rent and it's only four I only have to check is rent then save and new and do the exact
same thing again it's Harry Houdini but this time it will go into security deposit payable
so you put the same nine hundred and you put the same check number that's very important that you
put the same check number so we know what's going on when we get the bank statement this half for
deposit or whatever you want to put that helps you now when we click Save and close and click
OK we'll look at the security deposit report and you see the security deposit report shows
only Gary greenstein's deposit without messing up any of his rent it shows only Harry Houdini's
security deposit without messing up his rent and the total equal one thousand seven hundred
which is equal in the trial balance to the general ledger account that we created security deposits
payable so we have achieved our goal of separating out the deposits and having one account that shows
you the total of everybody's deposit now we're all set and we know how to do it however let's explore
the reports a little more deeply if we look at the other tenant balance detail the one that just only
says rent balances if we scroll down to the two last tenants you can see that it's only showing
the unearned rent part not anything to do with the security deposits over here so it's better
to rely on this rent balances report rather than the main one if you go to the main one
that we were using the whole time this one is not filtered so if you go all the way down this will
be the one that kind of mixes the tenants rent or the unearned rent mixed with the security deposit
so keep that in mind you three separate tenant balance details and keep in mind what they should