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View Full Version : What is the journal entry for amortization of insurance?


grace.device
Sep 7, 2010, 06:01 PM
I am confused if what is the credit account I'm going to used.. is it to credit prepayments or amortization account?

morgaine300
Sep 7, 2010, 08:27 PM
You don't amortize insurance - you expense it.

When you purchase insurance in advance, it's prepaid insurance, which is an asset account because you still have coverage (which has a worth) coming to you. As it expires, you remove it from the prepaid account and expense it.