On September 19, 200X, Solid Foundation Flooring paid $2,640 for a color ad in a monthly magazine. The ad will run for two years and will begin in two weeks (the October issue).

a. Is an adjustment required on September 30? Why or why not?

b. Is an adjustment required on October 31? Why or why not?

c. After the December 31 adjustment in the fi rst year, what is the balance of the Prepaid Advertising account?

d. Journalize the December 31 adjustment in the fi rst year.