If I understand what you did, this was a mistake. Starting balances should match the closing balance sheet balances of your prior accounting system. They do not involve the profit and loss statement. So, if your prior system was not perpetual, you should have transferred prior year net income to the old system’s retained earnings account before you began migration.
If I have misunderstood what you were doing, you will need to illustrate with screen shots. In particular, you need to explain what you mean by this:
especially after saying that the Starting Balances report matches your old accounting system. Further, exactly what do you mean by this:
If you do this entry first, your Balance Sheet Retained Earning should show Nil - Zero.
If not then there is a problem with the Journal.
That Journal entry is completely separate (stands alone) from the entry of the Balance Sheet opening balances, that is, the Retained Earnings in the Journal, doesn’t change, modify or adjusts the Balance Sheet Retained Earnings value which will contain all previous years of the P&L.
So step 1 - enter the journal - check that the BS Retained Earnings account is zero
Step 2 - enter the BS opening balances as per the closing balances of your previous system.
Step 3 - Summary tab EDIT button - have the start date as Jul 1 to what ever end date you want.
After that the P&L accounts should have zero values and the Balance Sheet should match your previous system’s closing Balance Sheet.
Have you created capital account(s) either via the capital accounts tab or via settings chart of accounts? This is necessary if you clear some or all of your retained earnings to capital account(s) each year.
Take this simple example:
Starting balances from previous system.
Cash Asset: $1,000
Fixed Asset: 12,000
Capital John: 5,000
Capital Jenny: 5,000
Retained earnings: 3,000
If you use a start date of 01/07/2020 and enter starting balances for the cash asset and the fixed assets the starting balances report will look like this: