Accounting Question

[Mark Phillips]

I run a US not for profit 501c3 on a cash basis. We are a club softball
organization with 2 teams. I reserve practice fields for the teams with the
local city government for about 4 months in advance. I pay nothing when the
contract is signed, because it is easier for the city to make changes to our
contract as time progresses (eg rain outs, we cancel a practice, add a
practice, etc.) and then bill me the exact amount used at the end of the
contract. I was wondering how to account for this.

1. I could just wait until the end of the contract and expense the field
rental out of the checking account. The problem with this is I want to make
sure I keep track of this liability for the corporation, and have enough to
pay the fee when the time comes.

How would i set up the accounts to (1) show the fact I have a future
obligation on my checking account, and (2) when I pay it, I have incurred an
expense?

Thanks!

Mark