Payments made to vendors for contracts that cover more than one fiscal year, should be recorded to a prepaid expense account control (1610) in the general ledger (Ledger 0). As each month of the contract expires, a charge equal to a monthly prorated portion of the total prepaid expense is expensed to the appropriate subsidiary Ledger 2 expenditure subaccount, and a credit is recorded to account control 1610. This type of situation occurs most frequently with maintenance contracts.