Insurance journal

Coala

Hi I need a small advice on insurance journal entry. I have Invoice for 2000 (15th October) in which administration and interest is included. Again this includes premises and motor insurance.and I am paying 200 by DD every month. Really confused how and where to enter all these transactions. Insurance invoice looks like a liability but in the same time part relates to the diffrent AP.
Many Thanks

Coala

and forgot to tell - insurance is for 12 months but payment in 10 installments.

Namadrama

What I gather from your post;

Dr Expense code P&L(s)i.e. Insurance, Admin (interest?) 2,000
Cr Creditor code B/S (who you owe the money to) 2,000

As each payment is made by you;
Dr Creditor B/S 200
Cr Bank B/S 200

At year end; if some of insurance relates to next AP;
This is a prepayment
Dr Prepayment B/S
Cr Expense code P&L

Coala

Thanks for that detailed description. But can I keep premises and motor insurance in one account (for CT1 purposes)? On invoice there is just one single amount for both. And as I understand DD payments does not affect any year end accounts exept bank account?

Namadrama

Im not clear on what your asking but Insurance in P&L can be for several different items.

And as I understand DD payments does not affect any year end accounts exept bank account? I did not suggest otherwise,

CT1 purposes? do you refer to accounts submission with CT1? if so, its okay to combine all insurance paid....please clarify otherwise

Coala

Im not clear on what your asking but Insurance in P&L can be for several different items.

I was meaning that insurance does not seperate premises and motor part.So I do not know how much would relate to motor expenses or just exclude it. Sorry for my explaining.

Namadrama

It is a business expense don't exclude it.
no need to split it out just expense it in P&L per my journal, the split is merely analysis of insurance.
If there is admin charges in invoice then take these out as appropriate, and expense under heading general expenses.

Hope this helps.

Coala

sorry,I am just confusing you more and more. I wanted to say that on CT1 return I will not include ( I did not mean to exclude it from accounts at all) any part from insurance in Motor and travel expenses because I do not know what part would relate to that. So all will be included in other expenses. Hope this time Im clearer .

Coala

Many thanks Namadrama, now Im understanding what is going on.