Once approved this invoice is now in Prepayments in the balance sheet.
We know it relates to Dec to Feb – 3 months so now we need to move 1/3 of the net value from the Prepayments account to the Rent account this is £3,000 / 3 = £1,000 per month in Dec, Jan & Feb.
If this was a 12-month invoice we would move 1/12 per month.
This will bring the value of the invoice on the Prepayments accounts down and the value on the Rent account up.
You could do this with three manual journals dated 1st of Dec, Jan & Feb, but the quickest way to do this is with a repeating journal. Navigate to this in Xero by clicking on:
Accounting >>>>>>>>>> Manual Journal >>>>>>>>>> New Repeating Journal