Dear Sir
please suggest below entry in books of account is correct We have done car insurance period 19 March 21 to 18 March 22
entry in books
insurance exp. 2541 up to March 21
prepaid insurance 74529
insurance exp payable 77069
You pass entry as follows
Insurance Expense A/c Dr 2451
prepaid Insurance Exp A/c Dr 74529
To Bank A/c. Cr 76980
( Being insurance exp paid )
on 31/3/2021 your Debit of prepaid Insurance balance will be carried forward next F.Y.
Next year pass following adjustment entry monthly portion up to March 22
Insurance Expense. A/c Dr
To prepaid Insurance Exp A/c Cr
( Being Insurance Exp adjusted paid last year )
prepaid Insurance A/c will be under Asset side Balance sheet
CAclubindia
