UK book keeping questions

[marisa]

hi I wonder if anyone can help me I have a couple of questions I'm doubting myself on.

1. the depreciation on fixed assets of 1462 with no residual value and a life of 4 years, and I need the figure per month
2. pre payment of a rent account for 2 months when rent is 3 months @ 870
3. pre payment of insurance for 2 month when insurance is annual @ 396
many thanks

 

[Tyson]

1. There are many different ways to depreciate fixed assets. First you need to figure out which method your teacher wants you to use. For the straight-line method you just take the total value (1462) and divide it by the number of months (4x12=48 months).

2. Do you mean that it costs 870 for 3 months? Then you would record a debit of (870 divided by 3 times 2) to your "Prepaid Rent" asset account.

3. Same thing. 396 divided by 12 times 2.