3 A company has a fiscal year-end of December 31: (1) on October 1, $17,000 was paid for a one-year fire insurance policy; (2) on June 30 the company loaned its chief financial officer $15,000; principal and interest at 5% on the note are due in one year; and (3) equipment costing $65,000 was purchased at the beginning of the year for cash. Depreciation on the equipment is $13,000 per year. 2 points eBook Print References If the adjusting entries were not recorded, would net income be higher or lower and by how much? Note: Decreases to account classifications should be entered as a negative. Adjusting Entry (1) (2) (3) Total higher lower higher higher Net income $ 4,250 38 13,000 Che

A company has a fiscal year-end of December 31: (1) on October 1, \$17,000 was paid for a one-year fire insurance policy: (2) on June 30 the company loaned its chief financial officer $15,000; principal and interest at 5% on the note are due in one year, and (3) equipment costing $65,000 was purchased at the beginning of the year for cash. Depreciation on the equipment is $13,000 per year: If the adjusting entries were not recorded, would net income be higher or lower and by how much? Note: Decreases to account classifications should be entered as a negative