Advance paid insurance

1)In the month of January you pass entry

Advance Insurance policy ( Asset) A/c Dr 12000
To Bank A/c Cr 12000
( Advance payment of Insurance)


2)Then every month up to December pass following entry .

Insurance primium A/c Dr 1000
Advance Insurance policy A/c Cr 1000
(primium adjusted against advance payment)

When you purchase it all the amount is capitalised

Dr Insurance 12000

Cr Bank 12000

And since it expires on the year end 

Dr. Insurance writeoff

Cr. Insurance 

If you reknew, it is an expense 

Dr. Insurance expense

Cr. Bank 

I hope I got it correct

Alright i didnt see the top entries. This means no need to write it off as 1000. Thrn what will haplen when you renew it? 

Great! 

Dr. Insurance plan

Cr. Bank

Advance Insurance  Policy  A/c   will be  under  Loans & Advances ( Asset Side )

See the top entries  chinesebuffetnearmenow.net  this means no need to write it off as Then what will haplen when you renew it? 
 

the account nomenclature must be prepaid insurance.

CORPORATES DESCRIBE THE SAME WAY.

Ive read somewehers here that first purchase is capifalized and whe  they purchase the premium it must be wxpensed. I still didnt get it . But Prasad Nilugal entries give a plausible explanation that his entries will be repeated.