In January, a company pays for advertising space in the local paper for ads to be run during the months of January, February, and March at $1520 a month. The journal entry to record the payment would debit:
A. Accounts Payable and credit Stockholders' Equity for $4560.
B. Advertising Expense for $1520, debit Prepaid Advertising for $3040, and credit Cash for $4560.
C. Cash for $4560, credit Advertising Expense for $1520, and credit Prepaid Advertising for $3040.
D. Accounts Payable and credit Cash for $4560.
Answer: B
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