Receive Security Deposit and Rent

[kara]

Our church has just completed work on a home that our youth pastor will be moving into. We have never had a parsonage before and I need assistance on setting up the chart of accounts to receive the security deposit (of which no interest will accrue) and the monthly rent. In addition, the youth pastor will be living in the parsonage rent-free for a few months, so I need to know how to treat this. Thank you, as always, for your assistance.

[kara]

In addition, I need to know what category to place the rent income in the chart of accounts.

[JohnDMeyers]

If the house is worth $80,000, and the rent is $500 per month, and the security deposit is $700, then here is what I would do:

Create these accounts:
01-1810-000 parsonage
01-1110-100 security deposit (sub-account of general checking)
01-2110-000 deposit return (liability)
01-4130-000 rent income

Record parsonage asset:
DB 01-1810-000 $80,000
CR ?? (I don't know if you have a mortgage) $80,000

Record security deposit:
DB 01-1110-100 security deposit $700
CR 01-2110-000 deposit return $700

Record rent:
DB 01-1110-000 general checking $500
CR 01-4130-000 rent $500

-----
Let's say you return $600 of the $700 security deposit in the future to the youth pastor, and $100 for misc expenses. That would look like this:
CR 01-1110-000 checking $600 (made out to youth pastor)
DB 01-2110-000 deposit return $600

CR 01-1110-000 checking $100 (made out to some vendor)
DB 01-5874-000 $100 some expense to fix parsonage


CR 01-4130-000 rent $100 (security deposit becomes income at this point)
DB 01-2110-000 deposit return $100
-----

I don't know what to do with the fact that you will not be receiving rent. It depends on whether or not you will making mortgage payments. If you post a little more information, I can help you out more.

[kara]

No there is no mortgage.