[helenoftroyv]

Prepaid insurance is a asset account with a debit balance. When that months prepaid insurance is expired, the prepaid account is credited for 1 months rent and the insurance expense account is debited for that amount also. Why is the insurance expense debited or increased. Shouldn’t it be decreased?

[morgaine300]

How do you decrease something that has never been charged? An expense was never put into that account as of yet, so what are you subtracting from? When it expires, it's used up and becomes an expense -- it was recorded as an asset prior to that because the coverage for the insurance was still into the future. Once the time has passed and coverage been "used," then you have to recognized the expense of that usage.