{m}.{s}.1 For the sake of clarity we have shown previously only one prepayment. There will often be more than one expense prepaid at the year end. For example:
Year end 31 December 2008
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Having calculated the prepayments they can then be put through using either one or two journal entries
One journal
These will be recorded by the journal entry:
2008 Dec 31 | Dr |
Cr |
|
Prepayments | 740 | ||
Rent | 240 | ||
Insurance | 500 | ||
to record closing prepayments |
Two journals
If you find it easier you can of course put through two entries.
2008 Dec 31 | Dr |
Cr |
|
Prepayments | 240 | ||
Rent | 240 | ||
Closing rent prepayment |
2008 Dec 31 |
Dr |
Cr |
|
Prepayments | 500 | ||
Insurance | 500 | ||
Closing insurance prepayment |
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[{m}.{s}e]