Total rent paid 10000 out of this 2000 relates to next year
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Answer:so current year balance sheet it reflects it only 2000 as pre paid rent in asset side.
From profit and loss it show 10000- 2000= 8000 in current year pnl account since rent paid in current year for 12 months extra paid is 2000 which will be treated as assets in current year balance sheet. After current year in next year only one effect of rent that is 2000 will be shown in pnl account.
Explanation:
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Answer:
prepaid rent account_____debit=10000
To cash account. =10000
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