Prepaid Rent T Account
Now we are in a position to study about Prepaid Rent T Account which is a form of Ledger . Previously, we already studied about, “ Prepaid Rent Journal Entry ”. The Normal Balance of Prepaid Rent Account is Debit, however, when it increases, we Debit it and when it decreases, we Credit it. Now, Let us prepare T account of Prepaid Rent by considering a simple example. Suppose, an entrepreneur acquired a Office Building on Rental Basis. The entrepreneur paid Rent Rs. 20000 on monthly basis. The entrepreneur paid Rent for 18 Months. Now, during the Current Accounting Period, the entrepreneur has used the benefits for 12 Months but for remaining 6 Months, the benefits are still not received by the business, so these 6 Months’s Rent is Prepaid Rent. We Record the following Accounting Journal Entries, when entrepreneur paid Rent For 18 Months as shown below: (Assuming That The Prepaid Rent Initially Recorded As An Asset) When Rent Paid: ...