Journal entry for rent paid in advance for the next year

1.	Journal entry for rent paid in advance for the next year
Answer» prepaid rent a/c dr To cash a/c Correct Journal Entry will be :Although amount is not mentioned in your question but i am assuming Rs. 6000 for the entire yearPrepaid Rent A/C - Dr 6000 To Cash A/C 6000(Being rent paid in advance for next year)Prepaid Rent will go to Balance Sheet as this is an Asset from the perspective that you have made the payment today for a benefit to be received in future.Crediting Cash means reducing Cash BalanceNext Year - Below Journal will be passed:Rent A/c - Dr 6000 To Prepaid Rent 6000(Being rent expense recognized)This Rent is an expense and will be transferred to Profit & Loss Statement.Crediting Prepaid Rent will knock off the Prepaid Rent debited last year.Hope it helps.ThanksCA Ankit Agarwal Rent prepaid a/c dr. To rent a/c

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