| Originally posted by : Onkar | ||
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If Sunil, a businessman runs shop in his cousin's office space for zero rent. After 5 years his cousin demands for rent of 5 years. No agreement was entered. Now, Mr. Sunil pays rent of Rs. 60,000 to his cousin. What will be accounting entries in Sunil's books. |
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Rent A/c Dr 60000
To Cash/Bank A/c 60000
Since there was no error or omission made by Sunil, regarding this transaction
this is not a prior period item
Yes the above entry is correct. The expense will be written off completely this year itself. No adjustment has to be done regarding pre/post matching.
yes above answers is correct
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