Journal entry will swift prepare to record this transaction is:
Debit Cash: $14,500
Credit Prepaid Rent: $14,500
A transaction in business is defined as an activity which involves the exchange of goods, services, and/or money between two or more parties. Transactions are the basis of modern commerce and are an essential part of the economic system. Transactions can take place between two businesses, between two individuals, or between a business and an individual. The transactions process is usually completed when goods, services, or money are exchanged for a specified amount. For example, when a customer buys a product from a store, the customer pays for it with cash or credit and the store gives them the product. Transactions can be completed online, through a bank, or in person. Transactions are a fundamental part of any business and form the basis of the business operations. Without them, no business can operate or be successful.
Debit: Cash $14,500
Credit: Prepaid Rent $14,500
Since Swift Company has paid for six months of rent in advance, the journal entry will include a debit to Cash for the amount of $14,500 and a credit to Prepaid Rent for the same amount. This entry will create a prepaid rent asset account which will be amortized over the six months of rent.
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