[cemon123]

My company has taken a new office on 1-4-2009 on lease for 1 year ,total rent 55000 RS. On the time of agreement 10000 cash paid ( 1-4-2009), and rest for 3 cheques ( amt 15000 each ) are issued for 3 different dates ( 1-7-2009,1-10-2009,1-1-2010 ). Please tell me how we pass the journal entries and how it will effect in P&L and balance sheet

[cemon123]

My company has taken a new office on 1-4-2009 on lease for 1 year ,total rent 55000 RS. On the time of agreement 10000 cash paid ( 1-4-2009), and rest for 3 cheques ( amt 15000 each ) are issued for 3 different dates ( 1-7-2009,1-10-2009,1-1-2010 ). Please tell me how we pass the journal entries and how it will effect in P&L and balance sheet

[morgaine300]

First I have a question of whether you need to worry about the exactness of your interim monthly statements? If not and a correct year-end figure is good enough, all you need to worry about is accruing that last 15000 payment that won't be paid until January. That would need to be a debit to rent expense and a credit to rent payable. It has to be charged in 2009 since that's what it is for. (And like all other expenses, they're on the P&L and like all payables, that's on the balance sheet.)

If you're not terrible comfortable with all the math and keeping track of things that doing it on a monthly basis would require, I would just charge them all to rent as you go and do the above accrual at year-end and leave it at that.

If you really want to charge it evenly on a monthly basis, then I'll tell you how but you probably won't like it.