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View Full Version : Pete paid the city 1500 for a three year license to operate a business.


confused0507
Dec 17, 2010, 09:06 AM
Determine amount of depreciation or other expense to be recorded

Just Looking
Dec 17, 2010, 09:13 AM
A license that is valid for 3 years is set up as a Prepaid, and written off equally over the three years to Taxes and Licenses Expense.

confused0507
Dec 17, 2010, 09:15 AM
How do I show this in my work. Can you show the formula?

Just Looking
Dec 17, 2010, 09:28 AM
Have you learned about journal entries? Do you understand debits and credits? You would also write it off on a monthly basis at 1500/36.