Prepaid Advertising appeared as $2,400 on the trial balance and as $2,200 on the adjusted trial balance. The proper adjusting journal entry to reflect the change must have been

Question

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The prepaid advertising account decreased by $200 ($2,400 - $2,200 = $200), which means that it was used up during the accounting period and should therefore be expensed. The proper adjusting journal entry would be to debit advertising expense (to increase the expense) and credit prepaid advertising (to decrease the asset). The correct entry is therefore Advertising Expense $200 and Prepaid Advertising $200. Choice D is the only option that reflects this entry.

Prepaid Advertising Appeared as $2,400 on the Trial Balance and as $2,200