Finance
4545 Points
Joined September 2020
Advance given is an current asset
Dr. Advance towards rent
Cr. Bank
Then when the time expires and advance is used up
Cr. Rent expense
Dr. Advance towards rent.
This is if the money is significant. We can leave off insignificant amounts like fast tag. Fast tag is an advance paid for toll gate. As long as you know that your business is a going concern, you can say it is a payment. When your company is dissolving and if you paid 1000 without using it the
Dr. Advance for fast tag
Cr. Fast tag payment
and write it as an operating loss
Dr. Write off advance for fast tag
Cr. Advance for fast tag.
Another way is directly write it off from the first entry as
Dr. Fast tag advance write off
Cr. Advance for fast tag