Quick Book Setup: Final Settlement Statement, Asset, Mortgage

[Ximing Feng]

Hi,

Hope this finds you well! 

I am a new real estate investor trying to set up my QuickBooks online so that I can do my own bookkeeping. So, I have this final settlement statement from my title company. It lists all the money that is credited to me and what I need to pay (debit):

Credit:

1. Earnest Money
2. Loan Amount (Credited from my mortgage Company)
3. Tenant’s Security Deposit
4. Tenant’s rent (since the property is closed in the middle of the month)

Debit:

1. The sales price of the property
2. Fees that I need to pay to the mortgage company (processing fees, appraisal fees, etc.)
3. Fees that I need to pay to the title company (processing fees, title insurance)
4. First-year home owner’s insurance
5. …..

With that, we have Debit – Credit = $8224.81. And that is how much I paid out of my pocket to purchase the property. I have one checking account (for rental income and all the expenses) and one saving account (only for the security deposit of the tenants)

Back to my QuickBooks online, in my chart of accounts, I have:

• Fixed asset account: added first journey entry as increase. The amount is the sale price of my property
• Long-term liability account: added first journey entry as increase, the amount is the loan amount.

My question is, how should I categorize the $8224.81? It is supper convoluted (to me). Especially the tenants' rent and their security deposit.

I also transferred security deposit money from my checking account to my savings account, pretending that the previous owner transferred the money to me (in reality, they are credited to me through the final settlement). How can I categorize this transaction? Do I need to create a chart of accounts for the security deposits?

Any help is appreciated! Thank you very much!