Accounting entry for paying one year's rent
Debit: Prepayment-Rent
Credit: cash on hand/bank deposit.
Monthly amortization:
Borrow: management fee-rent
Credit: advance payment
How to understand prepayment?
Advance payment refers to a kind of creditor's right that the buyer and the seller agree to pay part of the payment to the supplier in advance. In daily accounting, prepayments are recorded according to the amount actually paid.
For purchasing enterprises, prepayments are a kind of current assets. As current assets, prepayments are not compensated with monetary funds, but require enterprises to compensate with certain commodities, services or services in a short time.
"Prepayments" belong to asset accounts. For the prepayment paid by the borrower registration enterprise to the supplier, the lender registration enterprise receives the prepayment of the purchased goods, and the final debit balance reflects the prepayment paid by the enterprise to the supplier but not yet delivered.
It should be noted that if the end of this course is debit balance, it reflects the amount paid in advance by the enterprise; If it is the final credit balance, it reflects that the enterprise has not paid for goods and services.
What is the management fee?
Management expenses refer to various expenses incurred by the administrative department of an enterprise for organizing and managing students' production, operation and production activities, including but not limited to: company funds, labor insurance premiums, trade union funds, unemployment insurance premiums, legal fees, greening fees, welfare fees, etc. Refers to the expenses incurred by the board of directors and administrative departments in the daily operation and management of the enterprise or borne by the enterprise.
Management expenses belong to the period expenses and are included in the current profit and loss when incurred.
"Management expenses" belong to profit and loss subjects. This course debits the management expenses incurred by the registered enterprise, and the management expenses at the end of the credit registration are transferred to the "profit of this year" course. After the transfer, this account should have no balance.