Lesson 10: Prepaid and accrual schedules with EOMONTH and ROUND

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A prepaid expense is paid up front and recognized monthly. Monthly amount = total ÷ months, rounded to the cent with ROUND(x,2), because journal entries are posted in cents.

EOMONTH(start date, n) returns the last day of the month n months after the start. EOMONTH(B3,0) is the end of the start month. With month numbers 1, 2, 3… in column A, EOMONTH($B$3,A7-1) gives each posting date. The remaining prepaid balance after month n is total − monthly amount × n.

Worked example: =ROUND(1000/3,2)
Returns 333.33, not 333.3333…

Exercises

Exercise 1

Alder Street Studio prepaid a 12-month insurance policy. In B5, calculate the monthly expense rounded to the cent.

Exercise 2

In B7, return the month-end posting date for the month number in A7, then fill to B12.

Exercise 3

In C7, calculate the prepaid balance remaining after the month in A7, then fill to C12.