Prepaid Rent

Code: 1161
👁 Views: 105

Account Information

Financial Statement Statement of Financial Position
Normal Balance Debit

Definition

Rent amounts paid in advance for future periods

Common Journal Entries

Record prepaid rent

Dr. Prepaid Rent
Cr. Bank Account

Amortize portion of prepaid rent

Dr. Rent Expense
Cr. Prepaid Rent

Pay prepaid rent in cash

Dr. Prepaid Rent
Cr. Cash in Hand

Adjust prepaid rent at period end

Dr. Rent Expense
Cr. Prepaid Rent

Record prepaid rent

Dr. Prepaid Rent
Cr. Bank Account

Amortize portion of prepaid rent

Dr. Rent Expense
Cr. Prepaid Rent

Pay prepaid rent in cash

Dr. Prepaid Rent
Cr. Cash in Hand

Adjust prepaid rent at period end

Dr. Rent Expense
Cr. Prepaid Rent

📐 IFRS vs US GAAP Accounting Treatment

IFRS IAS 1 Presentation of Financial Statements
US GAAP ASC 340 Other Assets and Deferred Costs

❓ Frequently Asked Questions

Q: How is prepaid rent amortized?

A: A portion is charged as rent expense each month/period with the entry: Dr. Rent Expense, Cr. Prepaid Rent.