View Prepaid Insurance Journal Entry PNG. Create a prepaid expenses journal entry in your books at the time of purchase, before using the good or service. Prepaid insurance is the fee associated with an insurance contract that has been paid in advance of the coverage period.
The initial entry is a debit of1200dollars to the prepaid insurance (asset )account and a credit of12000dollar to the cash account in each successive month for the next twelve months there should be a journals entry that debit the insurance expenses account.
As a journal entry prepaid insurance related searches: Definition of prepaid insurance prepaid insurance is the portion of an insurance premium that has been paid in advance and has not expired as of the date of a company's at the end of each month, an adjusting entry of $400 will be recorded to debit insurance expense and credit prepaid insurance. Prepaid expenses may need to be adjusted at the end of the accounting period. When prepaying for an expense the journal entry is pretty much straight forward.
