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-   -   Prepaid expense correct entry (https://www.askmehelpdesk.com/showthread.php?t=247002)

  • Aug 9, 2008, 01:18 AM
    ngocanh
    Prepaid expense correct entry
    I'm still not clear of how to correct the prepaid expense. Let's say... I paid 20,000 for 5 years of insurance and I charge all to expense account on the first year... the correct entry should be:

    First year...
    Debit insurance expense 4,000
    Debit prepaid insurance 16,000
    Credit R.E 20,000

    Second year... it would be normal entry?

    Debit insurance expense 4,000
    Credit prepaid expense 4,000

    ??
  • Aug 9, 2008, 01:22 AM
    ngocanh
    Does anyone response to my question? I guess that someone is reading... but no response... could you at least give me a signal that... you're answering me?
  • Aug 9, 2008, 10:45 AM
    smartme
    Yes the entry you got it correct!!

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