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What is the journal entries for rent paid in npo
a npo paid a rent of 2 lac rs so what is the journal entries for it including tranfer entries of payment & receipt a/c and income and expenditure a/c ??
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Quick Summary
The journal entry for rent paid is a Prepaid rent taken as current asset since its not utilized for the Period paid for. For example one year. Journal Entries; Dr - Prepaid Rent and Cr - Cash/ Bank. Journal entry for rent paid in cash would be debit the Rent Expenses account and credit Cash Paid.
The journal entries for the payment of rent by a nonprofit organization would be as follows:
When the payment is made:
Rent A/C Dr. 2,00,000
To Bank A/C 2,00,000
When the rent received from a tenant:
Bank A/C Dr. 2,00,000
To Rent A/C 2,00,000
When the receipt is transferred to the Income and Expenditure A/C:
Income and Expenditure A/C Dr. 2,00,000
To Rent A/C 2,00,000
Even for an NPO, when there is a commercial transaction, AS is always applicable
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