An amount of $36,000 was paid as advance rent for three months. Expense which is incurred or paid to sales of goods or service providing is known selling expenses. The main expenses are office salary, management expenses, office expenses, office rent etc. 2. March 6: Services were provided to customers, and the company received $54,000 in cash. March 7: The accounts payable for office supplies purchased on March 4 was paid… 12/2—Paid monthly office rent, $500. Suppose a business rents premises and has to pay a rent deposit of 1,000 to the landlord. The company will pass this adjusting journal entry every month for the next 12 months to prepare and present the correct monthly financial statement of the company, after which the balance of prepaid rent and insurance account will become nil.. The furniture should last for five years. These expenses are incurred day-to-day office activities. Accountants record the entries into the journals when the event occurs in a business’ normal operations. Assuming you have not prepaid any rent for the next X amount of months,and are just paying as you go, it would be a debit to Rent Expense and a credit to Cash. Jan 3: Paid $60,000 cash on the purchase of equipment costing $80,000. These are both asset accounts and do not increase or decrease a company's balance sheet. The initial journal entry for prepaid rent is a debit to prepaid rent and a credit to cash. On December 31, 2018, Company Y Ltd paid the salaries for January 2019, amounting to $ 10,000 in advance to the employees of the company. Journal entry of paid for office rent 2 See answers Vickypanjiyar Vickypanjiyar 25. March 4: Office supplies were purchased on account totaling $35,000. by Fatima (Philippines) Before you begin: For purposes of testing and exams it's important to make sure you not only answer exercises correctly but do so at the right speed. Basic Accounting Journal Entries Exercise. 12/4—Purchased office furniture on account, $3,600. Under a two-entry system, accountants debit rent expense and credit rent payable. Double-entry bookkeeping, in accounting, is a system of bookkeeping so named because every entry to an account requires a corresponding and opposite entry to a different account.This lesson will cover how to create journal entries from business transactions. Create journal entry when I pay bill: Debit Prepaid Rent Expense by amount of rent and credit Equity Investment Payable by same amount (FYI - this is an LLC). I'm wondering if these are the right steps: 1. It is debited in journal entry and profit and loss account. Example – Journal Entry for Prepaid Rent. Use a watch or clock to time yourself while attempting this journal entries exercise. $300,000 were paid as advanced rent for six months. 12/3—Paid cash for a Dell computer, $3,000. The computer is expected to remain in service for five years. Example #2. In a single journal entry system, accountants debit rent expense and credit cash. Jan 4: Purchased office supplies costing $17,600 on account. 12/5—Purchased supplies on account, $300. Company-B paid 60,000 rent (5,000 x 12 months) in the month of December which belongs to the next year and doesn’t become due until January of the following year. Office rent account .Dr 2000 To Cash account 2000 ( being office rent paid) (since rent paid is expense for business and when expense increase we debit it so it has been debited and cash is increasing so , it ll be credited.) Prev As the amount will eventually be refunded by the landlord when the business vacates the property, it is not regarded as an expense of the business and is instead recorded as an asset in the balance sheet. Journal entries are the way we capture the activity of … Journal entries are representations of business transactions. Selling and distribution expenses . 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