Prepaid expense and how to make its journal entry
Prepaid expense and how to make its journal entry about the video : A prepaid expense is an expense that is paid in advance and its benefits is yet to received .. A prepaid expense is an advance payment of expense before its benefits is yet to be received. Prepaid expenses are Assets by nature and comes under the category of Current Assets. journal entry for the above transaction will be. Prepaid Rent A/c 5,000 Rent A/c 5,000 To Cash A/c 10,000 (being rent paid and prepaid ) here we have paid Rs 5,000 as advance rent which is an asset we have to adjust in the future. Here we add Prepaid Rent because we ADD Asset to our business.