Pass the journal entry :-
1). Office taken on Rent, paid towards office deposit to Mr. M.C patel vide Ch. No. 636253
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Pass the journal entry
Replies (6)
Rent Deposit Dr
Cr Mr M C Patel
Rent deposit dr
To cash a/c
rent deposit will be shown on assets side of bs
since cash is already paid it will be credited.
Rent Deposit A/c Dr. (Under Deposit Group)
To Bank A/c Cr
Rent Deposit..................Dr.
To Bank A/c...............Cr.
Rent Deposit A/c ..........Dr. XXX
To Bank A/c XXX
However if Deposit is non Refundable then Entry Should be..........
Rent A/c ................ Dr. XXX
To Bank A/c XXX
As Prateek says, if rent deposit is unrefundable, then it should be treated as deferred revenue expenditure and should be written offer over the entire tenure of the lease. I am attaching herewith a link which is very useful for CPT students. You are requested to kindly give me your feedback.
https://www.youtube.com/user/jbsclasses
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