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?
