Question
June 1: Rented office space and paid three months’ rent in advance, $3,000,
cheque 601.
Ans: Rent expense (DEBIT)
Cash (CREDIT)
adjustment:
a) One month’s rent had expired.
i think it will be:
prepaid rent (DEBIT $2000)
rent payable (CREDIT $2000)
CAN U CHECK IF THESE ARE RIGHT PLZ! THNX
cheque 601.
Ans: Rent expense (DEBIT)
Cash (CREDIT)
adjustment:
a) One month’s rent had expired.
i think it will be:
prepaid rent (DEBIT $2000)
rent payable (CREDIT $2000)
CAN U CHECK IF THESE ARE RIGHT PLZ! THNX
Answers
zeeshan
The rent is only expensed when it used.
When you pay for rent in advance you are paying for prepaid rent.
Entry #1
Prepaid Rent, $3,000 Debit
Cash, $3,000 Credit
Adjustment Entry #1 at End of Month
Rent Expense (Debit 1/3th of $3,000)
Prepaid Expense (Credit the value above)
Hope I helped.
When you pay for rent in advance you are paying for prepaid rent.
Entry #1
Prepaid Rent, $3,000 Debit
Cash, $3,000 Credit
Adjustment Entry #1 at End of Month
Rent Expense (Debit 1/3th of $3,000)
Prepaid Expense (Credit the value above)
Hope I helped.
Thara!
Hey!!! thnx zeeshan...this gave me the opportunity to edit my other entries similar to this...thnz ^_^