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Post Info TOPIC: Year End journal entries and prepayments


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Year End journal entries and prepayments


Hi Everyone,

My question is to do with year end and opening balances on the P/L. My insurance expense is appearing as a negative on the balance sheet for Q1 2024 and using the journals I used below will this wash out through the year or did I make an error in my timings. I recorded the accrual expense on 31st Dec 2023 for insurance as;

DR Insurance Exp 1200

Cr Acc Exp 1200

Then on the 01st Jan 2024 Reversed the expense;

Dr Acc Exp 1200

Cr Insurance Exp 1200

I wanted to record the invoice and did so on the 03rd Jan 2024 as;

Dr Exp 1200

Cr A/P 1200

Made the payment that day;

Dr A/p 1200

Cr Bank 1200

I wanted to record the insurance over 12 months as a prepayment;

Dr Prepayment 1200

Cr Insurance Exp 1200

So over the following 3 months I have

Dr Insurance Exp 300

Cr Prepayment 300

However my expense on the p/l is appearing as Negative 900, rather than positive 300 to show the insurance expense in real time. Will this wash out or Do I need to remove a journal?



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