Rent Accounting for ASC 842: Prepaid Rent, Journal Entries, and More
Additionally, at the time of transition to ASC 842, any outstanding prepaid rent amounts would be included in the calculation of the appropriate ROU asset. After his journal entry, the balance of prepaid rent will become zero ($5,000 – $2,500 – $2,500) while rent expense increases to $5,000 ($2,500 in January + $2,500 in February). …
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