Invoice for future services – Accrual/Prepayment – End of Month

Hello

We received our company water bill dated 01/04/15 for period 1Apr/15-31Mar/16, which total amount includes 20% VAT. This invoice will be paid by (8) monthly DDs from May/15-Dec/15.

As I monthly do all end of month postings, I need to post this invoice in our Sage 50 accounts system and also monthly DD payments.

I was instructed to post monthly accruals of 1/12 of bill net amount: Dr Water Rates and Cr Accrual. Then clear accruals when DD is paid by Dr Accrual, Dr VAT and Cr bank.

1 – I have been researching and understand this bill matches with prepayment not accrual, and should be fully posted first to Dr expense, Dr VAT and Cr Sundry Creditors – then Cr Expense and Dr Prepayment – all these posting with date of 10/04/15.

2 – Problem it is as I am still studying the F2 module of ACCA4 level Business and Accounting, I do not know what to do next 🙁

3 – I would be very grateful if someone could let me know how I should post the 8 monthly DDs and prepayments at the end of each month.

Many thanks