what is the journal entry of rent paid???
Answers
Answer:
The initial journal entry for prepaid rent is a debit to prepaid rent and a credit to cash. These are both asset accounts and do not increase or decrease a company's balance sheet.
Explanation:
hope it's help full
Answer:
.There are two scenarios for the journal entry. For example, the lease is 1k $ per month.
If the lessee paid the rent in advance for one year, the accounting journal entry: Debit- Prepaid Rent 12K$ and Credit- Cash on Hand (if paid in cash) or Cash in Bank (if paid by check) for 12K$. Since it is a prepayment, the accountant must adjust the prepayment account monthly by 1k via the following entry: Debit-Rent Expense 1K$ and Credit-Prepaid Rent 1K$. The adjustment must be done on a monthly basis until the 12K$ prepayment is fully expended. If there is a balance on the prepayment at the end of the accounting period, it should be recognized as a current asset in the balance sheet, while the total rent expense should be recognized as operating expense in the income statement.
The second scenario: the lessee pays the lessor monthly rent. The Accounting Journal Entry for each payment: Debit: Rent Expense 1K$ and Credit: Cash in Bank (if via check) or Cash On Hand ( if by cash) 1K$. If at the end of the accounting period, there exist unpaid monthly rent for three (3) months and the bill is received, the accountant must recognized the expense and the corresponding liability. The Adjusting Journal Entry: Debit-Rent Expense 3K$ and Credit-Accrued Expense Rent Payable 3K$. The adjusting entry will reflect the correct amount of rent expense for the period. It should be treated as an operating expense in the Income Statement