Accounting for Rental Property Fire Damage Claim

Market value is not an accounting entry, cost is what matters.

I would
Create an Other Expense account called fire loss, and an Other Income account called Fire loss income

When the building is complete and ready for occupancy ...

Journal the accum depreciation to the fixed asset account, then journal the fixed asset account to the fire loss expense account

Then journal the capex fixed asset account to the fire loss expense account, and if there is accum depreciation associated with the capex account first journal that to the capex account

Journal the insurance payment to the fire loss income account and a new fixed asset account for the property.
Journal the old land fixed asset account to the new land fixed asset account

Property should be set up this way as fixed asset accounts IMO
address of property
>> land
>> building
>> >> accum depreciation building

I have a similar situation I'm hoping you can help me with. We had several pieces of equipment damaged due to a lightning strike. The equipment has been replaced and we have filed an insurance claim. I have created an expense account "Equipment Replaced Lightning Damage"  to record the cost of replacing the damaged equipment. Should I remove the damaged equipment from the existing Equipment asset account? Should I enter the amount paid for the new equipment in the existing Equipment asset account? Once the insurance claim has been settled do I credit the amount received against the expense account? Your help is appreciated.

Thanks for your reply. I see that you also replied to my other post about some of the tax implications of this scenario, though I have some follow up questions based on your accounting recommendation here:

• In this scenario, the $50K is a gain on the books as fire related income, but not a taxable gain, since the money is all being used to restore the property, correct? That seems to be what Publication 547 is saying.
• Does Form 4684 apply? It seems to align with Publication 547 on not reporting a gain, though it also says "Your basis in the new property is the same as your basis in the old property." I'm not sure if restoring the property is considered "similar" or "new" within the Form's usage of those terms, but this would create a conflict with updating the basis if it were applicable. 
• Should the entire fixed asset account be treated as a fire-related expense if the property was not completely destroyed? That's what I was trying to get at with the market value stuff (interpreting from these tax forms) -- if the house is partially damaged and restored, wouldn't there be some residual value in the property to which the insurance reimbursement is added to create the new fixed asset value?