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Let's say a company's factory rent was $500,000. What is the journal entry for factory rent?...

Let's say a company's factory rent was $500,000. What is the journal entry for factory rent? What gets debited and what gets credited? Does it involve the manufacturing overhead? Thank you in advance!

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Answer #1

The expense incurred in respect of factory rent is classified as Manufacturing overhead.

Therefore, the factory rent is debited to Manufacturing overhead account and as the same has been paid, then Cash account will be credited.

Journel Entry
Accounts & Explaination
Debit Credit
Manufacturing overhead $             300,000.00
Cash $ 300,000.00
(To record payment of factory rent)
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