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Workers Compensation
Workers Compensation is paid in advance of the period the liability is incurred. You need to make a standard journal entry each month to expense a portion to the prepaid insurance premium. In order to post the expense to the period covered, you need to expense the prepaid amount over the year. When the workers compensation insurance is paid, post the payment to the prepaid workers compensation insurance account. Set up a standard monthly journal entry to expense one twelfth of the amount each month.