future_cpa
Jul 5, 2011, 06:02 PM
On June 1st I Issued Check No. 583 for $9,100 to pay Amy Wong Real Estate for two month's worth of rent in advance.
dom.b.fortin
Jul 6, 2011, 11:53 PM
Whose books are you talking about? And is this an operating or finance lease?
Well for simplicity, let's assume an operating lease.
Your books:
Upon Payment
Dr. Prepaid rent (an asset account) $9,100
Cr. Cash $9,100
After one month
Dr. Rent Expense $9,100
Cr. Prepaid Rent $9,100
Amy Wong's books:
Upon Payment
Dr. Cash $9,100
Cr. Deferred rent revenue (a liability account) $9,100
After one month
Dr. Deferred rent revenue $9,100
Cr. Rent Revenue $9,100