All Forum Posts by: Daniel Francoeur

@Jay Boyle

I see some good responses here, but just to be explicit, here are the following journal entries you would be creating for the lifecycle of a security deposit.

Example:

Renter pays a security deposit of $1,100 on the 10/15/2017.

A year goes by...

On 10/15/2018, the tenant moves out.

On 10/20/2018, you check out the apartment and find that there is $250 worth of damage you want to net against the security deposit.

On 10/25/2018, you return $850 to the tenant (hopefully they don't fuss over it!)

Here are the Journal Entries!

#1

Date: 10/15/2017

Description: Tenant pays a security deposit

Debit: Cash $1,100 (Increases Asset)

Credit: Security Deposit $1,100 (Increases Liability)

#2

Date: 10/20/2018

Description: Landlord assesses $250 of damage against the security deposit

Debit: Security Deposit $250 (Reduce Liability)

Credit: Security Deposit Deduction $250 (Increases Income)

#3

Date: 10/25/2018

Description: Return remainder of the security deposit to the tenant.

Debit: Security Deposit $850 (Reduce Liability)

Credit: Cash $850 (Reduce Asset)