Help with Liability Account Transfer

[TMeadows]

Hi,

We received rental money last year for a function that was occurring this year so I placed the money into a liability account. The event occurred earlier this year and part of the money was paid out to cover cleaning expenses, but there is a portion remaining still in the liability account. How do I clear out the liability account?

Would this be accurate?

DB 2410 Liability Account (Building Use Deposits)
CR 3110 Unrestricted Net Assets

Thanks for your help!

[NeilZ]

Hi,

We received rental money last year for a function that was occurring this year so I placed the money into a liability account. The event occurred earlier this year and part of the money was paid out to cover cleaning expenses, but there is a portion remaining still in the liability account. How do I clear out the liability account?

Would this be accurate?

DB 2410 Liability Account (Building Use Deposits)
CR 3110 Unrestricted Net Assets

Thanks for your help!

You should not be touching the Unrestricted Net Assets account, as the system usually takes care of adjusting the assets account.

Since this money in the liability account is now income, you should DEBIT the liability account, and CREDIT an income account.

If you don't have an income account for building use, you should create one. So, if you create an income account 01-4210 Building Rental Income, your transaction would look like this:

CR 01-4210-000 Building Rental Income $100 (security deposit becomes income at this point)
DB 01-2410-000 Building Use Deposit $100