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Accounting for unpaid annual invoice

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  • 28-02-2019 3:07pm
    #1
    Sterno
    Registered Users Posts: 19 ✭


    Hopefully this will be a straight forward one.

    I am looking for the journal entries on this post, as it is the first time I have crossed this.

    We have insurance that we have received running from November -October
    The invoice was received in 2018, but not paid until February 2019

    So currently I have

    2018
    dr 12 months of expense (when there should be 2)
    cr 12 months of payables (when there should be 2)?

    2019 I have
    dr payable (12 months)
    cr bank (12 months)

    what is the correct journal to get 10 months of the expense into 2019?

    Thanks so much
    Tagged:


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  • Options
    #2
    Chevy RV
    Registered Users Posts: 466 ✭✭Chevy RV


    Cr Insurance 10 months at Y/E & Dr Prepayments - 10 months

    Then reverse that Journal AFTER the year end in the new years accounts

    Dr Insurance 10 months & Cr Prepayments which will clear the prepayments account out and leave the 10 months in the new years accounts for insurance


    That should do it.


    Regards,


    Chevy RV


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