Insurance journal entry: Prepaid insurance definition
When you prepay rent or insurance, you’re secured against rate increases during that period. As a result, the company decides to debit Prepaid Insurance when the amount is paid semiannually. DateAccountNotesDebitCreditX/XX/XXXXExpenseXPrepaid ExpenseXLet’s say you prepay six month’s worth of rent, which adds up to $6,000. At the end of the month, before the books are […]