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Gauge Construction Company is making adjusting entries for the year ended March 31 of the current year. In developing information for the adjusting entries, the accountant learned the following:

1. The company paid $3,500 on January 1 of the current year to have advertisements placed in the local monthly neighborhood paper. The ads were to be run from January through June. The bookkeeper debited the full amount to Prepaid Advertising on January 1.
2. At March 31 of the current year, the following data relating to Construction Equipment were obtained from the records and supporting documents.

Construction equipment (at cost)	$	510,000
Accumulated depreciation (through March 31 of the prior year)		145,600
Estimated annual depreciation for using the equipment		40,800

Required:

a. Record the adjusting entry for advertisements at March 31 of the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Record the adjusting entry for the use of construction equipment during the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

c. What amount should be reported on the current year's income statement for Advertising Expense? For Depreciation Expense?

d. What amount should be reported on the current year's balance sheet for Prepaid Advertising? For Construction Equipment (at net book value)?

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