How to financially account for a lost security deposit
Hello all:
When a security deposit is received on a new long-term rental lease, I categorize that in my accounting system as "deposit", separate from rent. It isn't income, doesn't show as a gain, etc.
When that same tenant moves out one year later and forfeits that security deposit, how should I do the accounting? It is now a gain to my company, offset by some loss to contractors for cleaning, carpet replace, whatever.