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Allowance for Doubtful Accounts
6 Months Ended
Jun. 30, 2018
Allowance for Doubtful Accounts  
Allowance for Doubtful Accounts

 

Note 8 — Allowance for Doubtful Accounts

 

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of a tenant to make required rent and other payments.  If the financial condition of a specific tenant were to deteriorate, adversely impacting its ability to make payments, allowances may be required.  At June 30, 2018 and December 31, 2017, there was no balance in allowance for doubtful accounts.

 

The Company records bad debt expense as a reduction of rental income and/or tenant reimbursements. There was no bad debt expense in the three and six months ended June 30, 2018.  During the three and six months ended June 30, 2017, the Company recorded bad debt expense of $15,000 and $310,000, respectively, related to tenant reimbursements due from former tenants that filed for Chapter 11 bankruptcy protection.  In connection with these tenants, the Company wrote-off (i) $362,000 of unbilled straight-line rent receivable and $67,000 of unamortized intangible lease assets as a reduction to rental income and (ii) $884,000 of tenant origination costs as an increase to depreciation expense.