Thank you for providing me with so much detail, bhtproperty.
I can help you tag this transaction in QuickBooks Online.
You're on the right track with creating a security deposit. Yes, the funds should be treated as a liability to show that it doesn’t belong to you until it’s used to pay for services.
First, let's create a liability account to track the amount of security deposits. Let me show you how:
Next, create a service item that you can use when recording security deposits. Here's how:
When refunding a security deposit, you must first issue a check for the portion to be refunded.
Here are some articles for the complete details about security deposits:
The information above should help you with the security deposits. I'm happy to help some more if you have other questions in QuickBooks. Enjoy your day.