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Accounting questions?
Accounting questions?
What is the entry to record a rental deposit? How does this change if the first month was rent-free (ie. company signs 5yr lease, pays deposit & first month free)
Answers:
Chosen Answer
KLN: DR cash
CR customer deposits
If there is no security deposit then record the short term portion of your lease showing 11 months. The remaining 49 months of the lease to hit a long term portion account.
Each month you need to record the revenue so setup a standard entry reclassing one month of rent from the long term to the rental income account.
At the end of the year show that you are recognizing the full 12 months in the short term account so move one month from long term to short term.
2007-10-30 12:45:35
KLN: DR cash
CR customer deposits
If there is no security deposit then record the short term portion of your lease showing 11 months. The remaining 49 months of the lease to hit a long term portion account.
Each month you need to record the revenue so setup a standard entry reclassing one month of rent from the long term to the rental income account.
At the end of the year show that you are recognizing the full 12 months in the short term account so move one month from long term to short term.
2007-10-30 12:45:35