Here’s the Journal Entry (JE) you can make in QuickBooks Desktop:
Account Debit ($) Credit ($)
Opening Balance Equity
XXX.XX
Tenant Security Deposits (Liability)
XXX.XX
Replace XXX.XX with the total amount of unallocated tenant security deposits.
Date the journal entry as of the original setup date in 2022 (or the earliest practical date) so it doesn't affect current-year reporting.
🧠 Note: If you're allocating deposits by tenant, you'll want to track them via sub-accounts or in a liability register (or use customer/job tracking, depending on how you set up tenants).
After the JE
Your Opening Balance Equity account balance will decrease.
Your Tenant Security Deposits (Liability) account will show the correct amount owed.
Your overall balance sheet stays the same, just reclassified.
Asha Kanta Sharma
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