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    balvinder1234's Avatar
    balvinder1234 Posts: 8, Reputation: 1
    New Member
    		  
    #1

    Sep 25, 2013, 05:05 PM
    1 journal entry question
    4. Signed a contract for legal services starting December 1, 2014, for $4,900 per month. Paid for the first three months on December 1, 2014.

    Company uses an expense account instead of a prepaid so first entry is:

    Legal expense
    Cash
    TO RECORD THE INITIAL TRANSACTION

    MY QUESTION: how would I do the adjusting (reversing) entry for this transaction?
    I don't know what is the asset account for legal expense
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Sep 25, 2013, 05:27 PM
    Your asset account will be Prepaid Legal Expense.
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