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    roshini21's Avatar
    roshini21 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Sep 6, 2006, 06:32 PM
    Prepaid insurance
    I have a problem... I am renewing my company's insurance policy and I am paying 25% downpayment of the premium in Sept. and the rest in 10 monthly installments. When I pay down the 25% do I record this is prepaid insurance? Also, the 10 monthly installments should be recorded as insurance expenses when I pay it? I am really confused about this... please help!!
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Sep 6, 2006, 09:55 PM
    Simple way would be to

    Dr. Prepaid Insurance
    Cr. Cash

    And then at the end of the quarter or whenever you need to make adjusting entries for your financial statements, adjust for insurance expense. (Dr. Insurance Expense, Cr. Prepaid Insurance)
    MaxP's Avatar
    MaxP Posts: 1, Reputation: 1
    New Member
    		  
    #3

    Feb 28, 2008, 07:11 PM
    Comment on CaptainForest's post
    But very weak. How about an illustration
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