Tracking most recent year’s earnings and earlier retained earnings separately

- [Educator] Suppose you want to keep your equity…for the most recent year,…separate from the equity for all previous years.…All you need to do that is one additional equity account,…and a journal entry to move the money.…Well let's start by creating our new account.…On the homepage in the company panel,…I'm going to click chart of accounts.…Down at the bottom of the window, click the account button,…and then choose new on the menu.…We're going to create a new equity account.…

In the add new account dialogue box,…select the equity option and click continue.…I'm going to call this account past equity,…so I type that in the account name box,…and I'm going to give it the number 32,100.…That's all I'm going to fill in for now.…Just go ahead and click save and close.…And now I have my past equity account,…following my retained earnings account.…The next step is to create a journal entry…to move the past retained earnings into the new account.…

So we're going to run a balance sheet report.…I'm going to choose the reports menu,…