Your company bought a 30-second advertisement that aired during the Super Bowl 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?

Answer

		It increases both assets and liabilities by $1.2 million.
		It increases assets and decreases stockholders' equity by $1.2 million each.
		It does not affect the balance sheet.
		It increases liabilities and decreases stockholders' equity by $1.2 million each.