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J
JAB66
February 14, 2023
Question

How To Enter Financed Business Insurance In Quickbooks Online...

  • February 14, 2023
  • 1 reply
  • 0 views

What is the proper way to enter financed General Liability/Excess Insurance with a down payment if I am using accrual accounting in quickbooks online? The total premium for the General Liability/Excess Insurance is $9300 (these are not the exact figures). There is a down payment of $2800 paid to the insurance broker with monthly payments for 10 months paid to the lender in the amount of $800 ($640 principal + $160 interest). I want it to show an equal amount of the premium spread out over the next 12 months, which would be $775.00 for each month, so it shows up correctly for reports.  I'm sure there are some journal entries in the mix.   Thanks in advance!

1 reply

Rainflurry
Rainflurry
February 15, 2023

@JAB66 

 

IMO, the easiest way to do that is to create an other current asset account called 'Prepaid Expenses' if you don't have one.  Then, when you enter a bill, assign the premium portion to the Prepaid Expense account and the interest portion to your Income Expense account.  Then, each month make a journal entry (or set up a recurring journal entry) to move the monthly expense from Prepaid Expenses to your Insurance Expense account.  To do that, debit Insurance Expense and credit Prepaid Expenses for the monthly expense. 

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