a business has agreed to undertake an advertising campaign that will cost 240 000 an 591974

A business has agreed to undertake an advertising campaign that will cost $240,000 and will be carried out equally over the financial year, beginning January 1. Half of the annual cost is to be paid six monthly in advance on the first days of January and July. At March 31 the financial statements would show

1. An expense of $120,000 and an accrual of $120,000
2. An expense of $60,000 and a prepayment of $60,000
3. An expense of $120,000 and a prepayment of $120,000
4. An expense of $60,000 and an accrual of $60,000