at some point all tenants move out
that's why it's very important that you learn how to record refunding money to tenants
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news with this topic it's very simple to refund money to a tenant who is moving out first just
write a check in the same way that we learned make sure you include the tenant as both the payee
in the top field as well as the job in the field in the bottom right of the check
window the account in the lower left field will be the unearned rent account when giving back normal
rent and the account in the lower left field will instead be security deposits payable when giving
back the security deposit the bad news is that you have to write a separate check if you are
refunding both unearned rent and security deposit payable so for example let's imagine on april 7th
gary greenstein gets sick of holden and moves out he will not be charged for the week that he stayed
we owe him eight hundred dollars in unearned rent and another separate eight hundred dollars in
security deposit payable we gave him check number five specifically for the unearned rent and we
gave him check number six sports specifically for the security deposit payable so let's take a look
at how we would record this in quickbooks first let's take a look at the report specifically the
tenant balance detail now we'll scroll down to gary greenstein and you can see that this
report shows only an eight hundred dollar balance that's because the tenant balance detail report
shows only the rent and is not affected by the security deposits that we track separately so
let's also take a look at the trial balance and see right now before we pay him the 800
cash is 20 650 it's going to go down to 19 000 something when we give him back dollars
for his unearned rent and of course unearned rent will decrease to seventy five hundred
for the eight hundred dollars that we're giving back because it will no longer be an unearned rent
we're giving it back to him here's how we write the check we click the plus sign and we go over to
the vendor column and we click check just like we learned before now the date is april 7th of 2019.
we have to put gary both in the top left field where it says payee as well as the bottom right
field where it says customer that's the only way refund checks will work properly
in the bottom in the bottom left you have to click the pull down category to find the account
and in this case the proper account is unearned rent uh unearned rental income this one unearned
rental income this is the one that went up when we put the money in the account so when we take
the money out of the account to give it back this is the one that goes down now all you have to do
is put the amount and in this case the amount of unearned rent without a deposit is 800. so we push
the tab key see we click here push the tab key it saves the field now when i click save and close
the trial balance numbers are exactly as what we predicted cash and bank went down to 19 850
and unearned rental income decreased by the 800 that we just gave back to gary
now let's click reports and click tenant balance detail and you can see that henceforth and from
now on gary greenstein will have a zero balance because we gave him back his rent now let's give
him check number six for the security deposit and see what happens so we come back here to check
okay well we're off a little bit with the check number but don't worry
we're giving the money to gary greenstein
and we're going to put him both in the top left as the payee
as well as the bottom right for the customer the date is still the date he's moving out april 7th
but this time in fact quickbooks even remembers the amount but this time we're not giving him
back rent we're giving him back the security deposit payable the security deposit payable
now when we click save and close we can click reports and open up the trial balance and
you can see security deposits payable the general number has decreased down to 900.
let's take a look double-click and you can see it's down because we paid gary we could make this
column a little bigger a little wider by clicking and dragging it's down by 800 because of gary
greenstein because we paid him back check number seven on april seventh you could also confirm that
this has nothing to do with the tenant balance detail and that in the tenant balance detail
gary greenstein's balance is still zero now you can double check the security deposit account by
opening it up from the trial balance which is what we did and then we can filter by customer tenant
that's if you feel that you want to know a partial amount or how that security deposit might have
been used or distributed let me show you click the uh reports and go to trial balance now here's the
security deposit report and once you have a lot of tenants moving in a lot of tenants moving out this
will be a very long list and it might be a long time between the day you get the security deposit
from the tenant and the day you pay it back so you want to make sure there's an equal amount
in the security deposit account so what you would do is you would click customize and then you would
click filter and you would filter by customer you would specifically choose gary greenstein
uh where is this guy okay uh peyton plays gary greenstein now when i run the report i'm seeing
the same account you see this i'm seeing security deposits payable from the chart of accounts
but i'm seeing only transactions in security deposits that relate to gary greenstein and this
would help you double check that the amount of the security deposit that the specific tenant put in
to this general payable account is equal to the amount we gave him back when he moved out
you