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    AQADIR1's Avatar
    AQADIR1 Posts: 2, Reputation: 1
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    #1

    Jun 20, 2011, 11:46 AM
    Journal entry for prepaid insurance?
    Prepaid Insurance: 3,600
    Insurance expires at the rate of $344 per month.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Jun 20, 2011, 11:56 AM

    When you purchase the insurance the journal entry will be:
    Debit Prepaid Insurance for the amount paid
    Credit Cash for the amount paid

    To record the expired insurance the journal entry will be:
    Debit Insurance Expense for the amount of insurance expired
    Credit Prepaid Insurnance for the amount of insurance expired
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