General Journal Entry for Accrued Rent

by Jagjit
(India)

Accrued Rent Q: What is the general entry for accrued rent?


A:
To do the journal entry for accrued rent you should first understand what this means.

Accrued means is/are owed or owing.

So
accrued rent means rent owing. It is a liability , meaning a debt.

The journal entry for accrued rent will be:

DR Rent (expense) $1,000
CR Accrued Rent (liability) $1,000


What we're doing above is showing that we owe for the rent expense. We record the expense occurring (debit) as well as the liability (accrued rent - credit).

When the rent is paid we record:

DR Accrued Rent (liability) $1,000
CR Bank $1,000


Bank (asset) is decreasing so we credit it. And we cancel out the liability by debiting accrued rent.

Hopefully that answers your question!

Are other accrued expenses treated differently in the journals? Do you have more questions about accrued expenses? Comment below.

Best,
Michael Celender


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