Prepaid Rent: If the property being transferred is a rental, the prepaid rent on a rental property would have matching debit and credit entries.
Proration Example: $300 rent paid on the 1st of each month on a rental property. Property sold on January 15, 2006 and there are 31 days in January. The seller has the right to rent up to the 14th. The buyer has the right to rent from the closing date (the 15th) to the 31st (16 days). Now we have to divide $300 a month by 31 days = $9.667 per day. The seller owes the buyer 16 days x 9.677 = $154.84.