cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 1

How can you enter a one time annual expense and spread the cost out equally over the entire year as it should be?

If you have a 1200.00 annual service contract with a vendor that bills you up front... even though you pay the entire bill in one month, you should be able to spread the expense out over the 12 months of the year (or 100.00 each month).  Using QB Enterprise Retail Edition.

Solved
Best answer 12-10-2018

Best Answers
Anonymous
Not applicable

That is called a Prepaid expense which is a current asset...

That is called a Prepaid expense which is a current asset that gets used up monthly during the contract term.  Create an asset account and charge the initial payment there.  Then create a memorized monthly bill which charges the monthly fraction as an expense and also credits to the prepaid account (2 lines - net zero bill)

View solution in original post

4 Comments
Anonymous
Not applicable

That is called a Prepaid expense which is a current asset...

That is called a Prepaid expense which is a current asset that gets used up monthly during the contract term.  Create an asset account and charge the initial payment there.  Then create a memorized monthly bill which charges the monthly fraction as an expense and also credits to the prepaid account (2 lines - net zero bill)

View solution in original post

Level 15

You don't necessarily qualify to do this if you are Cash...

You don't necessarily qualify to do this if you are Cash Basis reporting entity.

If a Cash Basis entity prepays 24-months of rent, that is All Expense in the year paid and is not Allocated like this.

You have to ask your own CPA if you are allowed to carry and allocate Prepaid Expense.

Level 1

Re: That is called a Prepaid expense which is a current asset...

So that would be done via a journal entry?

Level 1

Re: That is called a Prepaid expense which is a current asset...

I have a prepaid insurance expense and need to amortize May YTD (Jan thru May). 

Need to get in touch?

Contact us