Prepaid Expenses Recording

Dear Sandeep
It is better to transfer Prepaid Expenses at the year end... rest is depend on your discretion.

Ok sir....Can we also initially book them as exp for current FY and and on 1st April again trf rest of prepaid exp to actual exp.

Transfer  on 31st march  , you  have show  in balance sheet  as prepaid Expenses . 

Sir For e.g.. We paid prepaid insurance for Rs. 12000 for one year from 1st June 2019 to 31st May 2020. Now how will the journal entries be passed?

When you pay prepaid Insurance entry will be

Prepaid Insurance A/c. Dr
To Bank. A/C. Cr
( expense prepaid )

from June every month you pass entry of Rs 1000/-

Insurance Expense A/c Dr 1000/-
To prepaid Insurance A/c Cr 1000/-
( prepaid expenses adjusted )

On 31 at March pass same entry however amount will be balance 2000/- reflected in balance sheet asset side .
Next year carry forward as oping balance and pass same above entry .

Got it sir but my question is that...Can we Pass a single entry on 1st June

Insurance Exp A/c Dr. 10000
Prepaid Exp A/c Dr. 2000
To Cash A/c Cr. 12000

We are paying Insurance primium. monthly also , getting receipt monthly and out of 10000/- only 1000/- is for June balance 9000/- for next months up to march and can't show in June .

Okay sir if it is the case of Prepaid Rent paid Rs. 12000 one time from 1st June 2019 to 31st May 2020.

Same as above in prepaid cases .