Prepayment Account entries
This account is debited when a prepayment invoice is
created on a supplier. This account defaults to
Prepayment invoice from Supplier Site
Following are accounting entries
Prepayment Accounting entries
1. When Prepayment Invoice is created in Accounts
Payable:-
Prepayment Account Dr
To Account Payable Liability Account Cr
2. When Prepayment Invoice is paid in Accounts
Payable:-
Account Payable Liability Account Dr
To Bank Account Cr
3. When Invoice is raised for Expense
Expense Charge Account Dr
To Account Payable Liability Account Cr
4. When Prepayment is applied at the time of remaining
invoice amt payment
Account Payable Liability Account Dr
To Prepayment Account Cr
5. When remaining invoice amt is paid in Accounts
Payable
Account Payable Liability Account Dr
To Bank Account Cr
