How to record the following:

1/28/2015 BCG monthly service fee, for example: check #632, $1,956.19; it includes monthly
fees $1,360 for February, and the rest of the money is for computer services in Jan.

2/16/2015 AT&T phone bill, Check #647, $299.28, Telephone bill from 01/05 to 02/04/2015.

How to record a prepaid expense:

- Enter payment to vendor using 121- Prepaid Expenses account on the Expense tab, NOT
other expense account
- At the end of each month make a journal entry:
a. Click Company and select Make General Journal Entries
b. Enter appropriate date for the period the expense actually belongs to.
c. Debit the expense account and Credit 121- Prepaid Expenses for the appropriate
percentage of the total payment (1/6 if 6 months, 1/12 if 12 months).

If there are invoices for services performed half - half month

- When you record the bill choose a date which is in second half month.

If there are invoices which are paid directly from the bank account and service date is for
last month
- make a journal entry for the last month to record the expense (Debit proper expense
account and Credit accounts 200 accounts payable account) and record the payment
into Check Register according with bank statement date (choose 200 accounts payable).

If there are invoices which are paid directly from the bank account and service date is for
next month/months
- Record the payment according with the bank statement date and choose 121 Prepaid
Expenses account. Next month make a journal entry to record expense into the
appropriate expense account (Debit proper expense account and Credit 121- Prepaid
Expenses for the appropriate percentage of the total payment).

When we get the invoice, for example: Intergraph Corporation, $300.00

When we record the bill, choose account 121 Prepaid Expense $300.00
Annual software maintenance fee from 4/1/15 to 3/31/16.

At the end of each month, we need to record the following

643 IT Service / Support / Software $25.00

121 Prepaid Expenses $25.00