Overview
This article will cover the situation where an entity holds an investment property,and the tenant fails to meet their obligations under the lease agreement, resulting in the bond being forfeited.
How to record it
In Simple Fund 360 and Simple Invest 360, there is no default account for rental bond forfeiture. Because of this, you can record the income using one of the following methods:
- Record the amount under the existing Property Income (28000) account, or
- Create a separate Custom Control Account to report it independently
Creating a custom account is recommended if you want the bond forfeiture to appear as a separate line item in financial reports.
Optional 1: Recording under the Property Income account
- Navigate to the Transaction List
- Create a new transaction
- Record the bond forfeiture as income using the linked 28000/Property Income account
Optional 2: Recording under a custom Rental Bond Forfeiture account
- Navigate to the Chart of Accounts
- Select Add Account, then press Other
- In the New Other Account window:
- Set Account Class to Control
- Enter an account code within the 20000–29999 range (to ensure it is treated as income)
- Enter a name (for example, Rental Bond Forfeiture)
After select Save
Optional: Select More Details >> to review settings such as SMSF Tax Label, In-House Asset Status, and GST Rate.
- Locate the relevant Property account in the Chart of Accounts and select More Details >>
- In the Edit Investment Account window:
- Under Linked Accounts, select Add Linked Account
- Choose Income, then select the newly created Rental Bond Forfeiture account
- Then select Save to create the changes
- Navigate to the Transaction List and create a journal entry to record the bond forfeiture using the linked account created in the step above