[Fr_Chuck]

I have not rented a new commercial location in a while. I just rented a new commercial location, I had to give of course a deposit on the location.
Lets say it is 3000 dollars. I know about accounting for my rental payment, but how do I show the deposit, I have paid it, but it is of course due back if and when I end the lease.

As a landlord when I rent my rental houses, I do not show the deposits given to me as income, since I place them in a separate bank account just for deposits.

[pready]

Hi Fr_Chuck,

From what I understand is that you are giving up one asset and are receiving the right to another asset at the end of your lease, so your journal entry will be:

Debit Security Deposits for 3,000
Credit Cash for 3,000

Below is the link that I found that explains security deposits

Is a security deposit for a rental agreement recorded in a liability account? | AccountingCoach.com Q&A

Just a note: The Security Deposit account would be a NonCurrent asset if you are expecting to receive your security deposit back after one year.

[Fr_Chuck]

Thanks,