[Patwe]

I just put in an escrow account for rental units into quickbooks. I put in our bank disbursement checking account which only holds a minimum required amount and is only used to pay back tenants or pay us when tenants incur damage fees. I created a bank account and sub bank accounts for each tenant. I created a liability account to show that this money is not ours and we are holding it for the tenants. Normally I can close the opening balance equity account with a journal entry but now I am not sure how to close it since I don't think using retained earnings or owners equity applies since this money is not ours. 1. How would you close out the opening balance equity and what account would you put this amount (created by the opening balance of the tenants bank accounts) into which would make sense? 2. We are required to hold a minimum of $1500 in our disbursement checking account that we use to pay the tenants back. This has created an addition $1500 in opening balance equity. This amount is ours so I assume I can put it into retained earnings or owner's equity? Would that be correct?3. This is an interest bearing account and the tenants earn interest that is held in their account. What is the classification of this interest since it is not ours and returns to the tenant in most cases?Any help with this would be appreciated. Thanks so much.

[paraclete]

You have made a mistake in setting these accounts up as bank accounts, They are creditors. The interest when credited to their accounts is an expense in yours.