Is prepaid rent an asset?
prepaid rent definition. A current asset account that reports the amount of future rent expense that was paid in advance of the rental period. The amount reported on the balance sheet is the amount that has not yet been used or expired as of the balance sheet date.Click to see full answer. Herein, why prepaid…
prepaid rent definition. A current asset account that reports the amount of future rent expense that was paid in advance of the rental period. The amount reported on the balance sheet is the amount that has not yet been used or expired as of the balance sheet date.Click to see full answer. Herein, why prepaid rent is an asset?The initial journal entry for prepaid rent is a debit to prepaid rent and a credit to cash. These are both asset accounts and do not increase or decrease a company’s balance sheet. Recall that prepaid expenses are considered an asset because they provide future economic benefits to the company.Secondly, what type of account is prepaid rent and what is its normal balance? It Is A Liability Account And Has A Credit Balance. It Is An Expense Account And Has A Debit Balance. It Is A Revenue Account And Has A Credit Balance. Regarding this, is prepaid expense an asset? Prepaid expenses are future expenses that have been paid in advance. You can think of prepaid expenses as costs that have been paid but have not yet been used up or have not yet expired. The amount of prepaid expenses that have not yet expired are reported on a company’s balance sheet as an asset.Is prepaid rent an intangible asset?For example rent. It is better known as “prepaid expense” which is as you state, can be seen as prepaid asset. You pay for something before you use it. An intangible asset is an asset which you can’t necessarily “touch”.
