Are you just now transitioning this data into QB?
"I have entered the total amount owed at the beginning of the year minus the Escrow"
You credit Liability; you would use Deposit to Escrow Bank for the funds they have on hand in your name. You never enter Escrow Owed. That is not part of the mortgage. That is part of the Payment, which has four parts:
Principal
Interest
Taxes + Insurance Escrow
"and minus the Interest"
You never Project Interest that will be owed; that is not part of the Mortgage. That is a split detail on the payment when you make the payment.
"which when I record it the amount owed now is correct. The problem I have is that when I entered the Interest which I put it towards an Interest Expense account it shows a negative amount on the report."
Which report is "the" report?
"What am I doing wrong? The Journal Entry"
Right there; Journal Entry is a mistake. You are spending from Banking. You use Check Expense, not JE. You just bypassed proper reporting for Cash vs Accrual Basis, as well.
"goes as follows: Debit: Asset (Rental Home)"
That's also a mistake. You are not Buying the Asset again. You own the asset; it just isn't free and clear. There is Debt to pay. Never post to the asset, if you are not Buying it with that banking transaction.
"Credit: Escrow Amount"
Also wrong. Credit Escrow will reduce that Asset.
"Credit: Interest Amount"
And that's backwards, as well.
"Credit: Balance-Liability Account. Can't figure out why Interest Expense shows negative amount."
Here's the problem with trying to use JE; you have a lot backwards. You are paying for QB, which has banking Tools. Use the Banking Tools:
Split the check, payee to the Mortgage company or Escrow Company or whoever processes the funds.
Check for $5,000; split into three lines:
Mortgage Liability account
Escrow bank account
Interest Expense
= total you just Paid.
Then, you get evidence that they paid your taxes from Escrow, so you make a Check Expense against the Escrow bank. Enter the split details of Property Tax Expense here. Now you reconcile this Escrow Bank to your Escrow Statements. They have your Money. You need to manage it the same as a bank account.
If it helps, a Check or Spending from Bank or any asset is Reduced by the Credit. Everything else is a Debit. You had that entirely backwards, and just stop working that hard. Use the Check Expense input screen for Banking; that's why it exists. Use Bank Deposit for Bank Deposit. That's why it exists. Use Credit Card Charge expense for CC spending; that is why that function exists.
