Prepaid Rent Journal Entry

Prepaid Rent Journal Entry

Prepaid rent is an asset (as benefit is to be consumed in future). Thus prepaid rent is debited in the books of account and cash is credited. This has been shown below

Date	Particulars	Dr.	Cr.
	Prepaid Rent	$ xxx
	Cash		$ xxx

Prepaid Rent Journal Entry example

In December 2014 a rent for financial Year is paid of $ 50,000. The payment of rent for next year will be recorded as under.

Date	Particulars	Dr.	Cr.
2014	Prepaid Rent	$ 50,000
2014	Cash		$ 50,000

Prepaid Rent Charged Expense

Prepaid expenses recognized as asset in previous year shall be charged as expense in the current year. Thus asset appearing in the books shall be removed or charged to expense in the current year. This has been shown below

Date	Particulars	Dr.	Cr.
2014	Rent	$ 50,000
2014	Prepaid Rent.		$ 50,000