Overview

Unfortunately, you might have a tenant move out without paying rent they owe. There are several ways to record this in DoorLoop. However, it's always best to speak with your accountant about how to handle this for your situation.

Here we'll walk through writing off the unpaid rent as a bad debt expense. For the first time only, you will need to create two new accounts in your Chart of Accounts. After that, you use a journal entry to write off the unpaid rent.

  1. Create the Accounts

  2. Create the Journal Entry


Create the Accounts

The first time you write off unpaid rent as a bad debt expense, you will need to create two new accounts in your Chart of Accounts.

  • One is an expense account called Bad Debt Expense

  • The other is a sub account of Accounts Receivable called Allowance for Doubtful Accounts.

Step 1

From the main menu select Accounting < Chart of Accounts.

Step 2

In the top right corner of the page, click on the + New Account button.

Step 3

Select Expense in the Type dropdown menu.

When you repeat these steps again for the second account, choose Asset -> Accounts Receivable.

Step 4

Type in Bad Debt Expense in the Account Name field and add an optional description for your reference.

When you repeat these steps again for the second account, use Allowance for Doubtful Accounts for the name.

Step 5

Leave the Active Account toggle on.

When creating the Allowance for Doubtful Accounts item, toggle on This is a sub-account and select Accounts Receivable.

Step 6

Click Save to finish creating the account.


Create the Journal Entry

Next, you will create a journal entry for the amount of unpaid rent. After creating the new accounts above, creating the journal entry is the only thing you will need to do to record unpaid rent as a bad debt expense.

Step 1

From anywhere in DoorLoop, click on the + Create New button in the upper left and select Journal Entry in the Other Transactions section.

Step 2

Set the Entry Date and select the Property associated with the unpaid rent.

Step 3

On the first line, from the Account drop-down, select Accounts Receivable and add an optional Description. (Such as unpaid rent or something to remind you why you are creating this journal entry.)

  • Enter the amount of the unpaid rent in the Debit column.

On the second line, select the Rent revenue account in the Account drop-down.

  • Enter the amount of the unpaid rent in the Credit column.

Click the Add Line Item button and select the Bad Debt Expense account in the Account drop-down.

  • Enter the amount of the unpaid rent in the Debit column.

Click the Add Line Item button and select the Allowance for Doubtful Accounts account in the Account drop-down.

  • Enter the amount of the unpaid rent in the Credit column.

Step 4

When you're done, click Save.




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