[GNC] Rental property - How to account for delinquent rents?

[replicon]

Hi all,

I'm tracking finances for a rental property with a couple of tenants.

So far, I've been very fortunate and had good tenants who've always paid
their rent. However, I now have a tenant who is struggling to ramp up his
business as fast as anticipated, and the rent payment plan on the lease is
falling behind.

Currently, my setup for tracking rent income is super simple:

Income:Rent <=> Assets:Business Checking Account

(rent is auto-deposited into the biz checking account)

Intuitively, it would seem like, until I forgive a missed payment, a missed
rent payment is like a "loan" to the tenant, with any late fees incurred
being counted as "interest income" when it's finally paid off.

... But then how do you model the scenario where it's never paid off, and I
have to basically take the loss (forgive the loan)? It seems wrong to
transact it as "Assets (Loan) -> Expenses (Loan Forgiveness)", because I'd
be reporting an extra expense without having actually spent any money, which
feels like double-dipping.

Plus, if they finally pay off the rent, I don't know how I'd transact such
that the loan amount goes into my bank account AND shows up as income... So
I'm clearly missing something here.

What's the right way to handle this kind of case?

Thanks a lot!



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