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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.

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Best answer December 10, 2018

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Anonymous
Not applicable

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

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)

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Highlighted
Anonymous
Not applicable

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

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

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Level 15

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

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.

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Level 2

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

So that would be done via a journal entry?

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Level 2

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

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

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