(basic)accounting help plz!

June 1: Rented office space and paid three months’ rent in advance, $3,000,
cheque 601.

Ans: Rent expense (DEBIT)
Cash (CREDIT)

adjustment:
a) One month’s rent had expired.

i think it will be:

prepaid rent (DEBIT $2000)
rent payable (CREDIT $2000)

CAN U CHECK IF THESE ARE RIGHT PLZ! THNX

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asked by Thara!
  1. If you are studying accounting, the following tutorials may be of value to you:

    http://search.yahoo.com/search?fr=mcafee&p=basic+accounting+tutorial

    Sra

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  2. The rent is only expensed when it used.

    When you pay for rent in advance you are paying for prepaid rent.

    Entry #1
    Prepaid Rent, $3,000 Debit
    Cash, $3,000 Credit

    Adjustment Entry #1 at End of Month
    Rent Expense (Debit 1/3th of $3,000)
    Prepaid Expense (Credit the value above)

    Hope I helped.

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    posted by zeeshan
  3. Hey!!! thnx zeeshan...this gave me the opportunity to edit my other entries similar to this...thnz ^_^

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    posted by Thara!

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