on 1st jan 20×3 a business had a prepaid insurance of 10000. on 1 aug 20×3, it paid, in full the annual insurance invoice of 36000 to cover the twelve months to 31 july 20×4 amount charged to profit and loss for 31dec 20×3?
We credit cash and debit the insurance account. (And then of course we deal with the amount of the prepayment in the way I explain in my free lectures)