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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 ?? |
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