Need some ideas

[Steve]

Hi,
I need some help setting up some new accounts to handle an somewhat unusual situation. I'll try to keep this a brief as possible.

I own a mortgage - in other words I am the bank in this situation so I set up some accounts like this:

Assets
   Property
Income
   Interest
      Property

In the beginning, Assets->Property contains the amount of the mortgage and each month's check decreases that account by the principle and the remainder is the interest. (Ignoring escrow)

Like many people, the owners got behind on their payments and one day I found out they had just left. After some time, working through the legal system I got the property back in my name. There were expenses involved with this and so I created a new account Expenses->Property. 

I refurbished the property - new sub-accounts of Expenses->Property, put it on the market and recently sold it. I hold the mortgage for the new buyer also.

So my question is: how do I handle the transition? Do I continue to use the same Asset->Property account to track the principle owed and adjust the amount with a capital gain/loss transaction for the difference between the old mortgage and the new mortgage? Or would it be better to somehow close out the old mortgage and create a new account Asset->Property2? Is there a right way to do this or is any way OK?

I'm looking for some ideas.
Thanks
Steve