How to show the Prepaid Expense?

How to show the Prepaid Expense?

Please follow the below steps to show prepaid expenses:

Step 1: Book an Invoice for the whole amount under Expense Tracker and pass the relevant Payment Entry.

Step 2: Create a ledger head "Prepaid Expense (E.g. Prepaid AMC-Lift) under General ledger-->>Chart Of Accounts-->>Asset.

Step 3: Pass a journal entry to show the Prepaid Expense for by Debiting the Prepaid Expense Account and crediting the Same Expense Account against which you have passed the Payment Entry.

Step 4: In the current Financial Year pass the reverse Entry by Debiting the Expense Account and crediting the Prepaid Expense Account
Note: This entry will be passed after the Year-End.