Rent Liability in a Balance Sheet

Hi Sister123, 

 

Generally, unpaid rent is recorded as a liability when using accrual accounting:

• If you have a rent invoice, enter it as a bill, code it to Rent expense, and leave it unpaid. It should then appear under Accounts Payable/current liabilities on the Balance Sheet.
• If you haven’t received an invoice, an accountant or bookkeeper may need to record an accrual journal for the rent owing.
• If you’re using cash accounting, the rent is generally recorded when it’s paid.

If you’re unsure which method applies or how to handle the GST and tax treatment, it’s best to check with your accountant or bookkeeper.

 

Regards,
Genreve