Journal entry for rent paid in …

prepaid rent a/c dr To cash a/c

Correct Journal Entry will be : Although amount is not mentioned in your question but i am assuming Rs. 6000 for the entire year Prepaid Rent A/C - Dr 6000 To Cash A/C 6000 (Being rent paid in advance for next year) Prepaid Rent will go to Balance Sheet as this is an Asset from the perspective that you have made the payment today for a benefit to be received in future. Crediting Cash means reducing Cash Balance Next Year - Below Journal will be passed: Rent A/c - Dr 6000 To Prepaid Rent 6000 (Being rent expense recognized) This Rent is an expense and will be transferred to Profit & Loss Statement. Crediting Prepaid Rent will knock off the Prepaid Rent debited last year. Hope it helps. Thanks CA Ankit Agarwal

Rent prepaid a/c dr. To rent a/c