[acctgmry]

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?

[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.