when we receive rent well the cash in our bank  account goes up because we just received rent  

and of course the account called unearned rent  which is the account that represents the total  

money that the landlord really owes back to the  tenants until the tenants stay in the apartment  

or office that will increase the amount that  we did not earn will increase when we receive  

money in advance of course the individual tenants  balance will reflect the amount that the landlord  

owes the tenant for future staying on in the  apartment or office please note we will not  

use the undeposited funds feature in QuickBooks we  will assume that all tenants payments are directly  

deposited into the bank account checks received  are immediately deposited into the bank account  

please watch the QuickBooks banking videos that  I made for you if you need to understand more  

about undeposited funds and when the bank account  actually increases if you know QuickBooks you can  

use the undeposited funds feature in your own  company but for this video we will assume the  

money either goes directly into the bank account  from the tenant or the tenant gives us a check  

and we always deposit it on the same day for  example let's imagine on January 1 we received  

$6,000 from Dave in apartment 3a for six months  rent in advance and he gave us cheque number 84  

and we ran to the bank and deposited Dave check  obviously this is $1,000 per month but for now  

let's just record what we have not yet earned  from the icon bar click payment the date that  

we are imagining Dave paid us is January 1 of 2017  the customer or the tenant that paid us was Dave  

in 3a he gave us cheque number 84 and you have to  make sure that you're putting it into the correct  

bank account not undeposited funds and not paypal  we put it into Chase Bank now the money amount  

that he paid us $6,000 to save just the field  on the left of your keyboard push the tab key  

and now we have the payment recorded on January 1  with all the appropriate information at the very  

bottom of the window click Save and close and  at the minute you save the payment QuickBooks  

asks you if you should print a credit memo the  answer is yes click print predator print credit  

memo now in a real situation you would click  print and give Dave the credit memo however  

for this video I will instead click preview and  this is what the rent receipt would look like we  

know it's a credit but it'll say rent receipt  and at the very bottom it says balance credit  

which means that we owe excuse me the landlord  owes the tenant the six thousand dollars that  

the tenant paid until the tenant actually stays  in the apartment during that time so what is now  

the result of that transaction well if we look at  the trial balance we see that Chase Bank has shown  

up for the first time as six thousand dollars an  unearned rental income has also shown up in the  

trial balance for the first time as $6000 you  can also see the details in the tenants report  

the tenants balance detail shows specifically  Dave in 3a made a payment on January 1 into  

the unearned rent account unearned rent income  and we owed Dave six thousand dollars worth of  

rent until time goes by and Dave stays to use up  what he paid so what is now the result of that  

transaction well if we look at the trial balance  we see that Chase Bank has shown up for the first  

time as six thousand dollars an unearned rental  income has also shown up in the trial balance for  

the first time as six thousand dollars you can  also see the details in the tenants report the  

tenants balance detail shows specifically Dave in  3a made a payment on January 1 into the unearned  

rent account unearned rent income and we owed Dave  six thousand dollars worth of rent until time goes  

by and Dave stays to use up what he paid let's do  the second one now let's do the second one let's  

imagine on January 1 we received 7200 from Donna  an apartment 4b for six months rent in advance and  

this is the check number of the check she gave us  immediately deposited and that means that Donna's  

monthly rent is 1,200 per month so from the top  left we click payment we make sure we have the  

correct date check number and going into the  right bank account it was checked number seven  

one seven seven one seven the amount she paid  us was seven thousand two hundred dollars and  

basically that's it all we have to make sure you  choose the right tenant in this case so Donna On  

January 1 gave a 7200 with check number 7 1 7  that was deposited into Chase Bank now when we  

click Save and close remember you have to print  the credit memo but in our video we will only  

preview it so that you see what it looks like  it says rent receipt and it also says a credit  

balance on the bottom for the amount the customer  paid but the interesting results are here in the  

trial balance notice unearned rental income is  thirteen thousand two hundred and if anyone asks  

why is unearned rental income thirteen thousand  two hundred you can tell them that if they look  

at the tenants balance detail they can see  that Dave the tenant gave six thousand that  

we have not yet earned Donna the tenant gave seven  thousand two hundred that we have not yet earned  

so the total money that is unearned from from  tenants is thirteen thousand two hundred as of  

January 1 and that thirteen thousand two hundred  is the same thirteen thousand two hundred in the  

general ledger chart of accounts trial balance  unearned rental income 13200 now let's imagine  

our third tenant johnny is a bit of a deadbeat  and on january 1 he paid nothing but his monthly  

rent is seven hundred dollars per month and if we  spoke to Johnny and Johnny promised he would have  

the rent within the week we should put that in the  notes in the tenants records so from the icon bar  

we can click tenants records which is really  the customer center click on Johnny the tenant  

and then click on notes now we're going to go to  manage notes add a new note date and time stamp  

the note and hit enter and say Johnny promise to  pay by January 7th and whatever other information  

you feel is necessary to remember about Johnny  when you click OK the note stays there and all  

you have to do is open the tenant Center click on  Johnny and you will see the substance of the note