Prepaid expense accounting
This query is : Resolved
08 December 2011
Sir,
The instance is
1. Advance Amount paid to Annual Maintenance Contract (AMC)
2. Contract period is 01.05.11 to 30.04.12
3. Amount paid Rs 12 lakh(100%) on 01.07.11
4. Now, Expense should be debited from july 2011 to April 2012?
OR
May 2011 to April 2012 ( Rs 1 lakh each)?
The instance is
1. Advance Amount paid to Annual Maintenance Contract (AMC)
2. Contract period is 01.05.11 to 30.04.12
3. Amount paid Rs 12 lakh(100%) on 01.07.11
4. Now, Expense should be debited from july 2011 to April 2012?
OR
May 2011 to April 2012 ( Rs 1 lakh each)?
08 December 2011
Expense should be debited from May 2011 to March 2012 at1 lakh per month
1 lakh should be accounted as pre-paid expense as on 31/03/2011
1 lakh should be accounted as pre-paid expense as on 31/03/2011
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