Answer:
The correct answer is C prepayment $3,300.
Step-by-step explanation:
In this case, John paid $16,500 for advertising in the local newspaper, which covered a period of 15 months until 31 March 2009. Since John's financial year ends on 31 December, the amount paid for advertising will be recorded as a prepayment in his balance sheet at 31 December 2008.
The amount of the prepayment can be calculated by dividing the total amount paid for advertising by the number of months covered, which is 15 months. This results in a prepayment of $16,500 / 15 months = $1,100 per month. Since the prepayment covers the period from 1 January 2009 to 31 March 2009, the total amount of the prepayment at 31 December 2008 will be $1,100 * 3 months = $3,300. Therefore, the correct answer is C prepayment $3,300.