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Following Accrual Concept:: The entry for the due rent of the previous month would be as
Building Rent Expense $ Dr.
Building Rent Payable $ Cr.
And now it is now being paid so the entry would be,
Building Rent Payable $ Dr.
Cash $ Cr.
Dr. Accrued Liability
Cr. Cash
1) Entry for rend due (This entry has to pass at the end of the last month):
Rent A/C Dr $
To Building Rent Payable (Current Liability) A/c Cr. $
(Being rent payable for ......(last) Month)
2) At the time of rent Paying (This month):
Building Rent Payable (Current Liability ) A/c Dr $
To, Cash (Current Asset ) A/c Cr. $
(Being Rent paid for .......(Last) Month)
Entry at the end of last month when the rent became due:
Rent A/c Dr. $2,
To Rent Payable A/c $2,
Being rent on building due for the month.
On payment of cash $2,/-
Rent Payable A/c Dr. $2,
To Cash $2,
Being cash paid.
Dr. Rent Payable
Cr. Cash
The reason of this being, you must have already booked Rent Expense by debiting Rent Expense and Crediting Payable Account (creating a liability). So now you are eliminating your liability by paying you Rent in cash.
Thanks.
Rent payable Dr.
Cash cr.
from
Accrued Expense.
to
cash
Building Rent Dr
Cash Cr
But before u had to pass this entry for rend due $/-
Rent A/C Dr $/-
To Building Rent Payable (Current Liability) A/c Cr. $/-
Building Rent Payable (Current Liability ) A/c Dr. $/-
To, Cash (Current Asset ) A/c Cr.$/-
Rent Payable 2,.
Cash 2,.
#to pay rental expense last month
Since the rent payable was accrued in last month,so assuming the Rent expense has already been booked in last month by passing Rent Expense dr
To Rent payable
Now while making the cash payment for the rent following entry shall be passed
Rent Payable Dr. $
To cash in hand $
