Question

3. A company has paid the rent pertaining to the year 2011 in advance in the year 2010. What
journal entry will be booked in the year 2011? *
(1 Point)
O a. Debit Rent, Credit Prepaid Rent
b. Debit Outstanding Rent, Credit Rent
O c. Debit Rent; Credit Bank
O d. Debit Prepaid Rent: Credit Bank​

Answer 1

Answer:

debit rent account , credit prepaid Rent account

Answer 2

Answer:

Journal entry will be booked in the year 2011 is Option D i.e. Debit Prepaid Rent: Credit Bank​

Explanation:

• The journal entry for the rent paid in advance  is a Prepaid rent taken as current asset as it is not utilized for the Period paid for.
• For  one year. Journal Entries would be Debit - Prepaid Rent and Credit - Cash/ Bank.
• Journal entry for the rent paid in cash is debit the Rent Expenses account and credit Cash Paid

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