Sometimes a business does not own any specific type of property, plant, and/or machinery. They take the required asset on rent and pay the pre-specified installment for the asset in terms of cash or cheques. Rent paid journal entry is passed in order to record the necessary rent payments against rented assets. Rent is an expense for business and thus has a debit balance.
Rent is generally:
- Paid every month
- Has fixed installment
- Recurring in nature
- Shown under the head of ‘Office Rent’ or ‘Factory Rent’
Rent Paid Journal Entry
Journal Entry:
Example 1:
Rent of ₹10,000 is paid every month, in cash. Record the necessary journal entry for the month ending March 2023.
Solution:
Example 2:
Rent of ₹5,000 is paid every month, through cheque. Record the necessary journal entry for the month ending April 2023.
Solution:
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