What Is Rent Paid In Advance | Journal Entry
We already discussed about Adjustments In Accounting in our previous article, but here we particularly concerned about Prepaid Rent (PR) Journal Entry. Business needs property and building for carrying out the business activities. So, they either build their own buildings to establish their head office or they get the building on rent. Here, we consider the Real Estate Business where a company which is doing the business of Real Estate and gives offices on rent and charges monthly for giving these offices. The Real Estate company also receives the amount of rent in advance from the company getting the office on rent. This is PR for the company getting the office and Outstanding Rent for the Real Estates company. From the point of view business, it is a Current Asset for the Company getting office because the company will receive the benefits in future period of time and Current Liability for the Real Estate Company because the company is liable to provide ...