Experienced Member

Re: Journal Entries and Bills

This is a pretty complex and unnecessary way of reducing your prepaid account if you know how to do a Journal Entry.  When you paid the Vendor using the prepaid account, all that needs to be done is to reduce the prepaid account with a JE.  Go to Create Journal Entry, Date it 1/31/19, Debit to Insurance Expense, Credit to Prepaid Insurance for the amount of Jan 2019 and then again 2/28/19,  the same entry for the amount of Feb 2019. You don't need to even wait for an invoice to do it.  Do it every month, same time, same way until the total amount you paid reduces the Prepaid account to zero.  You can even do it all upfront for the entire year.  Just ensure you date it for each individual month the period the insurance covers.

Hope that makes your life easier.

-Joanne Leasure, Day One Accounting and Financial Services