Journal entry

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 April 2018 i want to know which entry is correct totally confuse please tell me journal entry of prepaid expenses for my point of view is

Prepaid Rent A/C DR
To Bank
(exp paid in advance)

Rent Exp A/C DR
To Prepaid Rent A/C

The net effect of entry is

Rent Exp A/C DR
To Bank

but the correct entry is

Prepaid Rent A/C DR
To Rent A/c
how, can any one explain when we paid exp in advance then bank account should be use as above i mention. please explain the step wise because first we paid exp in advance and then in future we received invoices shoe both the event/transaction.

Thanks
Sanjeev Kumar

Guest

Guest (Expert)

23 April 2018 Either:
Prepaid Rent A/C DR
To Bank
(exp paid in advance).

or

Rent Exp A/C DR
To Bank
------
Prepaid Rent A/C DR
To Rent A/c

Querist : Anonymous

Querist : Anonymous (Querist)

24 April 2018 sorry not satisfy your ans can you plz explain what event happen then we create first entry and when we put second entry. step by step explain

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