1938, Bringing Up Baby. Cary Grant in a lady's dressing gown explains "I just went GAY!!"
1949, A Connecticut Yankee, Bill Bendix, Cedric Hardwicke and Bing Crosby sang "Busy Doing Nothing," wherein "and then inspect the rainbows so they'll be bright and GAY!"
The latter can be heard here, in an unmistakeable tone: youtube.com/watch?v=j9oWIrRC7NA
It was in common use in the reel world, but not in the real world.
I have a book on the shelf published in 1942: OUR HEARTS WERE YOUNG AND GAY. It is named that because the only meaning that “gay” had to the two authors meant light-hearted and happy.