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Black Interiors contracted with Better Homes and Gardens (a monthly magazine) to pay in advance for advertisements that would appear for the next three years
Black Interiors contracted with "Better Homes and Gardens" (a monthly magazine) to pay in advance for advertisements that would appear for the next three years - beginning with the March 20x3 issue of the magazine (the last advertisement would appear in the February 20x6 issue of the magazine.) The cost of the advertisements, covering the three-year period, was $50,400; the company debited the Prepaid Advertising account on March 1, 20x3 for $50,400. The Black Interiors Company contracted with "Architectural Digest" (a monthly magazine) to pay in advance for advertisements that would appear for the next two years - beginning with the October 20x4 issue of the magazine (the last advertisement would appear in the September 20x6 issue of the magazine.) The cost of the advertisements, covering the two-year period, was $42,000; the company debited the Prepaid Advertising account on October 1, 20x4 for $42,000. Assume the company's year-end is December 31st, and that appropriate adjusting entries are recorded each year, on December 31st. Indicate the balance in the following accounts on the unadjusted trial balance as of December 31, 20x4. Prepaid advertising Advertising expense Indicate the balance in the following accounts on the adjusted trial balance as of December 31, 20x4
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