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-   -   Adjusting entry for prepaid expense (https://www.askmehelpdesk.com/showthread.php?t=283635)

  • Nov 21, 2008, 12:55 PM
    acctgmry
    Adjusting entry for prepaid expense
    If I am adjusting my prepaid expense, I would debit my prepaid expenses for the amount I'm adjusting but what would I credit? I know normally you would credit prepaid insurance or whatever the expense is for but I do not have an account of pre-paid insurance.. is there such a thing of making an account called pre-paid assets?
  • Dec 12, 2008, 06:36 PM
    pready

    The adjusting entry is:

    Debitt the appropriate Expense account for the amount.
    Credit the PrePaid account for the amount used in the period.

    Example: PrePaid Rent:

    Debit Rent Expense for the amount used
    Credit PrePaid Rent for the amount.

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