Deposit on rent agreement

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Aashish Soni (Querist)
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07 January 2013 Dear,

My Boss has paid a deposit of amount of Rs. 60,000.00 while entering into a Rental agreement (Commercial Property).

How should I treat this. What Should be this entry.

CA Lokesh Pokharna

CA Lokesh Pokharna (Expert)
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07 January 2013 entry will be

advance/deposit ag. property (xyz ) a/c dr.

to bank

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Aashish Soni

Aashish Soni (Querist)
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07 January 2013 Thank you very Much :)

If you can also tell me that this deposit will be under B/Sheet untill its paid right??

if we get the deposit in 3 years (completioin of agreement) so the entry will be

Bank A/c DR.
To Deposit ag Property (XYZ) A/c CR.

Is this correct??

CA Priyank Singhi

CA Priyank Singhi (Expert)
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07 January 2013 The above entry is correct. For the next 3 years it will be shown under C/A, Loans & Advances.

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Sanket

Sanket (Expert)
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07 January 2013 If you are the tenant, you will record the transactions as payment and as asset account (rent deposit) in balance sheet section.

Now on the part of the landlord or the one who receive the payment it will be recorded as liability account (refundable deposit or payable account) in the balance sheet.

Hope my answer help you

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Aashish Soni

Aashish Soni (Querist)
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07 January 2013 Dear, I have a doubt in this.

If the landlord has deducted an amount of Rs.15000 towards repairs / nonpayment of Rent for the last month. How will the entry be posted then.

Wil it be

Bank A/c Dr. 45000
Expenses / Rent A/c Dr. 15000
To Deposit ag. Property CR. 60000

Please help.

CA Lokesh Pokharna

CA Lokesh Pokharna (Expert)
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07 January 2013 bank a/c 45
rent a/c 15
to deposit ag. property 60

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