I need to record a car loan. The payment for the month is paid prior to the month beginning, i.e. October's payment is paid on Sept 30. So for the first month, I would record the payment in prepaid assets, correct?

Then to record the loan, I will make an entry for 12 months of principal payments to a notes payable- current account and the remainder of the capitalized amount to long term liabilities.

When the payments are made each month, what will be the entries?

Does the prepaid amount remain on the balance sheet each month?

Thanks!