My company made an agreement "Employee Medical Insurance Contract for the year 2018" and the total amount will be paid on 4 payments "Every 3 month" according to the deal and the contract terms. Should i account all the amount as a "prepaid expense" and credit the "A/P" although we've only paid the first installment which paid as a down payment when the deal is happen. The entry Scenario: 1 - Dr. Prepaid Expanse "with only the Quarter Amount" / Cr. A/P "with only the Quarter Amount" 2 - Dr. A/P Cr. Bank r Cash 3 - Then Amortize the monthly expense amount Dr. Medical Insurance Exp. / Cr. Prepaid Exp. I was about to consider the first quarter payment ONLY as a prepaid expense and ignore the rest amount of the contract until the due date is coming and the payment is done i will account them as "prepaid" (the above entries scenario) the problem is the as follows: i received a monthly invoice cancellation for the employees who were left the company i get their money back "the full amount of the subscription" for ALL THE REMAINING YEAR "this amounts have been included in the total amount of the contract which i only recorded the first quarter"
