UK Rent Deposit - where in the accounts is this recorded?


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If a company pays the landlord of a property a rent deposit to be held by the landlord in case the tenant should stop paying the rent, should this be recorded in the accounts as an asset?
 

bklynboy

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Yes. Its a escrow liability for the landlord and an asset for the lessee. Usually called "Rent Deposit".
 
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If a company pays the landlord of a property a rent deposit to be held by the landlord in case the tenant should stop paying the rent, should this be recorded in the accounts as an asset?
This is a prepayment.
DR:PREPAYMENT
CR:BANK this is when the money was initially paid

On a monthly basis CR:Prepayment and DR:Rent to charge rent expense
 
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