Journal Entries and Bills

2robertc · ‎February 20, 2019

Here's what I'm doing:

I prepaid a Jan19 insurance premium in Nov18 (By Check)
I received a invoice from the insurance company in Feb19 for Jan19 and Feb19 premiums
I entered the 2 bills
I used a JE to move the prepayment in Nov18 to A/P.
I cleared the Open Balance on the Jan19 bill with the credit that was created by the JE
The Total "Open Balance" on transaction screen is "$0" (This is good)
The last line Total "Amount" is showing the amount of the "Credit" not "$0"
Can someone please tell me what I'm doing wrong? See Screen Shot attached.

Thanks for your assistance.

Anonymous · ‎February 21, 2019

Hello 2robertc,

Thanks for reaching out to us, and for the steps you have done.

The OPEN BALANCE column will only show how much is the remaining balance of a transaction. Let's take for an example the Bill 00354 in your screenshot. If the bill payment check created for it was only $2,000.00, you'll see an amount of $2,005.83 in that column. Otherwise, it'll show zero.

You're doing it right, 2robertc. It doesn't necessarily both columns have the same total. The total amount showing in the AMOUNT column is the sum of all transactions. While, the OPEN BALANCE column is the total amount of remaining balance for all transactions.

Come back to us with more questions about QuickBooks. We'll be right here to help.

View solution in original post

Anonymous · ‎February 21, 2019

Hello 2robertc,

Thanks for reaching out to us, and for the steps you have done.

The OPEN BALANCE column will only show how much is the remaining balance of a transaction. Let's take for an example the Bill 00354 in your screenshot. If the bill payment check created for it was only $2,000.00, you'll see an amount of $2,005.83 in that column. Otherwise, it'll show zero.

You're doing it right, 2robertc. It doesn't necessarily both columns have the same total. The total amount showing in the AMOUNT column is the sum of all transactions. While, the OPEN BALANCE column is the total amount of remaining balance for all transactions.

Come back to us with more questions about QuickBooks. We'll be right here to help.

DayOneAccounting · ‎February 21, 2019

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

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