Question - On July 16, 2013, Y & P Enterprise paid $3,000,000, a significant amount, for a television ad to be in aired during the Super Bowl in February, 2014. Y & P Enterprises is on a calendar year. Which of the following best describes the accounting treatment for the cost of this ad?
a. Record the ad as a prepaid asset and expense the cost after it airs during the Super Bowl.
b. Expense the cost of the ad immediately on July 16, 2013.
c. Record the ad as a prepaid asset on July 16, 2013, and expense the cost of the ad as an adjusting journal entry (deferral) on December 31, 2013.
d. Record the cost of the ad as a liability until it airs on television during the Super Bowl.