A business has agreed to undertake an advertising campaign that will cost \($240,000\) and will be carried out equally over the financial year, beginning January 1. Half of the annual cost is to be paid six monthly in advance on the first days of January and July. At March 31 the financial statements would show

a. An expense of \($120,000\) and an accrual of $120,000

b. An expense of \($60,000\) and a prepayment of $60,000

c. An expense of \($120,000\) and a prepayment of $120,000

d. An expense of \($60,000\) and an accrual of $60,000