<human>: Can you condense the text into three sentences or less?

I have two children 8 and 6.

We rent an old house, at least 100 years old. Tonight I discovered that the children have been etching into the banister at the bottom of the staircase. This is not just one little scratch. It is very noticeable, goes deep into the wood, and is on the front and side of the bottom support. 

It's a big problem. Our landlord is going to shit.  There is no way to stain/ treat the wood the way it is now. We can sand and restain it but it is damaged in a way that it will never be the same again.

Obviously the kids need to understand that they cannot be destroying property whether it belongs to them or someone else. My daughter, when I yelled (cause I freaked a bit), started crying and said she was stupid. She is convinced now she is a bad person.

My husband and I have said that we need some time to think about their consequences. We explained to her (8) that she is not stupid, nor is she a bad person but she made a very bad choice and needs to learn from it. 

I am so angry. I don't want to over punish but I also feel like they need a lesson they will remember because this is not a small thing. At the same time, does it matter that they have no idea what a huge deal what they did was?
<bot>: 8 and 6 year old carved into 100 year old banister in RENTED house.  What are reasonable consequences for this?