Entry for 5 years rent paid
Onkar (Student) (47 Points)
07 March 2014Onkar (Student) (47 Points)
07 March 2014
CA. Roopali Kadam
(Jobs on assignment basis.)
(1459 Points)
Replied 07 March 2014
Originally posted by : Onkar | ||
If Sunil, a businessman runs shop in his cousin's office space for zero rent. After 5 years his cousin demands for rent of 5 years. No agreement was entered. Now, Mr. Sunil pays rent of Rs. 60,000 to his cousin. What will be accounting entries in Sunil's books. |
Rent A/c Dr 60000
To Cash/Bank A/c 60000
Since there was no error or omission made by Sunil, regarding this transaction
this is not a prior period item
Arvind Sharma
(CA Final)
(149 Points)
Replied 09 March 2014
Yes the above entry is correct. The expense will be written off completely this year itself. No adjustment has to be done regarding pre/post matching.