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Roaring Lion Company bought a 30-second advertisement that aired during a major sporting event at a cost of $1.2 million. It is legally obligated to
Roaring Lion Company bought a 30-second advertisement that aired during a major sporting event at a cost of $1.2 million. It is legally obligated to pay for the ad but has not yet done so. How does the purchase and use of the ad time affect your company's Balance Sheet?
a. It does not affect the Balance Sheet.
b. It increases assets and decreases Shareholders' equity by $1.2 million each.
c. It increases both assets and liabilities by $1.2 million.
d. It increases liabilities and decreases Shareholders' equity by $1.2 million each.
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