Prepaid Income Journal Entry

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.

Prepaid income journal entry. Journal entry for prepaid income with the modern rule. Advance rent received a c representative personal a c personal rule tenant paying cash giver credit. According to the three types of accounts in accounting prepaid expense is a personal account.

Rent received a c income a c nominal rule rent earned credit. Bank a c dr 20 000. Prepaid rent received a c dr 30 000. Bank a c dr 30 000.

Journal entry for prepaid expenses. The journal entry for the transaction is the following. When income is recognised as income in the next accounting period then we have to post below accounting entry. Prepaid expenses are those expenses which are paid in advance for a benefit yet to be received.

Income received in advance but which is not yet earned or receives cash in advance before it provides goods or render services. To prepaid rent income a c 30 000. Example advance rent from its tenant of 10 000 entry at the time of receiving advance 1. To rent received a c 30 000.

Accounting entry for income received in advance. Below is the journal entry for prepaid expenses.