Your Company Contracted for a 30-Second Commercial (An Advertisement)that Aired

Multiple Choice

Your company contracted for a 30-second commercial (an advertisement) that aired during the Super Bowl at a cost of $1.2 million.It is legally obligated to pay for the commercial,but has not yet done so.How is your company's balance sheet affected on the day the commercial aired?

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