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Forums › ACCA Forums › ACCA FA Financial Accounting Forums › Prepayment
Moira prepares its financial statements for the year to 30 April each year. The company pays rent for its premises quarterly in advance on January 1, April 1, July 1 and October 1 each year. The annual rent was $201600 per year until 30 June 2008. It was increased from that date to $230400 per year.
What rent expense and end of year prepayment should be included in the financial statements for the year ended 30 April 2009?
Can i see the calculation please?
201600×2:12=33600 and 230400×10:12=192000 33600+192000=225600 will transferred to Income ans expense account.(Rent expense)
and 38400 will be transferred to Balance sheet as a prepayment. good luck.
Rasad I’d prefer if you explain as you go along please.thanks for answering.
how did you calculate the prepayment?
Hi Shanda would you still like to get an explanation on this?