How do I document stolen equipment from fixed assets?

Treat it as a disposition of assets:  Show the insurance check as the "sale" price...then do the following:

First you should compute depreciation expense to date of sale and enter, then General Journal these entries:

.Debit Depreciation Expense

          Credit Allowance for (or Accumulated) Depreciation

Then in a separate entry:

Debit Cash for anything received

Debit Accumulated Depreciation for whatever balance there is

         Credit the Asset account for anything received

         Credit the Asset for any balance left to bring it to zero

Debit (loss) or Credit (gain) whatever is left to "gain (or loss) on disposition of Equip” (Other income type account)