How do I record a prepaid expense, like a year of insurance?

Record the payment as an asset, then move one month's share to expense at the end of each month. Say you pay $1,200 in January for a year of insurance. The $1,200 goes to Prepaid Insurance, an asset on the balance sheet. At each month end, $100 moves from Prepaid Insurance to Insurance Expense. By December the asset is back to zero.

The point is a fair monthly picture. Expensed all at once, January carries a year of insurance and the other eleven months carry none. Rent paid ahead and software billed yearly work the same way.

Whether the whole payment is deductible in the year you paid it is a tax question for your CPA, and they may want it booked differently.

In Switchbooks, Switch books the payment to the prepaid account and the monthly entries. Tell him the term if the bill does not say it. With the weekly books check on, his note early each month lists month-end entries not booked yet.