Closed out CD account but not balance sheet is off

I can help you zero out the negative balance of the BD account in your balance sheet. komatthew. Let me add the specifics below.

Before we begin, could you tell us why the starting amount is different from the deposit? Please note that the difference in amounts is causing a negative in your Balance Sheet.

To clear it out, you can also create a journal entry to zero or clear out the amount in your financial report.

1. Click the +New button.
2. Select Journal entry.
   
3. Choose an account from the Account field and enter it on the first line. Then, based on whether the transaction requires a debit or credit to this account, input the appropriate amount in either the Debit or Credit column. 
4. On the next line, select the other account you're moving money to or from.
5. Double-check the amounts, you should have the same amount in the column on one line and the Debit column on the other. This means the accounts are in balance.
6. Click Save.
   

However, it's best to reach out to your accountant for additional advice on this matter to make sure everything is handled properly since this will affect your financial reports.

Once your negative balance is cleared out, you can now proceed on reconciling your account. Refer to this article for detailed guidelines: Reconcile an account in QuickBooks Online.

We're always committed to helping you navigate QBO with ease and confidence, especially when managing your balance sheet. Don't hesitate to reach out if you have other concerns, and we'll get back to you promptly to address them.

@komatthew  The likeliest explanation is that you were not accounting for the CD interest in such a way that the CD balance was increasing by the interest income each period.

To give a proper answer, you'll need to explain how you were recognizing the CD interest income in your books.

A standard way of doing this is by way of the Deposit function to the CD account using Interest Income as the source account; this recognizes your interest income at the same time as it increases the CD balance.

Thanks for the reply. The amounts are different because we made $2194 in interest on the CD, so when they deposited it back that's why the amounts were different.

I tried the journal entry, but it doesn't work because the debit and credit need to match, and then that results in adding to my checking account. Right now my checking account matches the bank, so that can't change.

Any other way to change it?

Thanks for the reply.

I wasn't recognizing the interest in the CD because for some reason it wasn't showing up from the bank. So basically I just told my account about the interest earned each year and then he added it to the taxes. Then when we closed out the account, the large chunk was deposited back into the checking. So maybe that could be why I have the negative? 

Any way to fix this?

Thanks!

Thanks you for the reply.

Yes its option #3. The CD was incurring interest, and the interest was staying in the CD account. For some reason the interest was not showing up in the CD bank account, and therefore was not being added in the QuickBooks. 

How do I use the "deposit function" to add the interest incurred into the CD account? I know the interest amounts for each year. 

Thanks for the help!

@komatthew  I'm not particularly familiar with the steps in QBO, but I believe you would click +New, then Bank Deposit as shown in the image from @Jayson_E  above.

There should be a spot to choose which bank the interest income is going into (The CD), a spot to select who the interest income was received from (Probably a column named Received From), and a spot to select the account the money is sourced from (Interest Income, probably a column named Account).

Aside from entering the amount and date in, that should be it.

Thanks. But I don't think that will work. If I include anything with the checking account in the journal entry, then that will throw off my balance, currently checking matches the bank account.

Maybe I need to go back to where the original $47,194.12 was deposited into the checking account, and undo that, and then maybe there is a way to split the interest earned and the original 45K?

@komatthew  It's not a Journal Entry, it's a Deposit.

It won't have anything to do with your checking account; you need to use the CD.

@Rainflurry  I think I'm having some trouble phrasing this one effectively, if you want to take a shot at it.

Oh okay thanks!
I tried the deposit, but then it results in a -2194.12 and a positve 2194.12, resulting in back to the same problem. Since the deposit can from the CD and its going to the CD.

Thanks for your patience. Yes that solved it! Thanks so much for all the help.

Hi @Rainflurry and @FishingForAnswers!

I'm glad you joined in to help komatthew with the incorrect balance in their CD account. I agree with recording the interest as a bank deposit. This should correct the balance in that register and the Balance Sheet, which he also confirmed.

For everyone else with a similar concern, you can refer to the attached screenshot for a visual guide on adding interest earnings to accounts.

Good Question