Exemplary Prepaid Rent On Balance Sheet

The adjusting entry on January 31 would result in an expense of 10000 rent expense and a decrease in assets of 10000 prepaid rent.

Prepaid rent on balance sheet. A 2000 credit entry to Rent Expense in the worksheets. A 2000 credit entry to Rental Revenue in the worksheets adjustments column OB. In short store a prepaid rent payment on the balance sheet as an asset until the month when the company is actually using the facility to which the rent relates and then charge it to expense.

Prepaid rent definition A current asset account that reports the amount of future rent expense that was paid in advance of the rental period. Current assets is a section on a companys balance sheet and it often includes prepaid expenses. For some this is an ongoing bookkeeping concern that impacts balance sheets month after month.

Prepaid rent in trial balance is allocated in the asset column because it is recognized as a future expense which is not expired yet. Prepaid rent is an asset account in which its normal balance is on the debit side. The Accounting Equation and Prepaid Rent.

Balance Sheet As of October 31 20XX. Total Liabilities and Owners Equity. Other current assets are cash and equivalents accounts receivable notes receivable and inventory.

The assets value decreases along with its depreciation amount on the companys balance sheet. Prepaid rent is a current asset. Prepaid rent typically represents multiple rent payments while rent expense is a single rent payment.

As the name suggests prepaid rent is rent paid prior to the rental period its related to in a tenant-landlord contract. The expense would show up on the income statement while the decrease in prepaid rent of 10000 would reduce the assets on the balance sheet. Which of the following entries would have caused this difference.