4. Consider Adjusting Journal Entries - Prepaid Expenses: Waterfalls Corporation purchased a one-year insurance policy in January 2013 for $60,000. The insurance policy is in effect from March 2013 through February 2014. If the company neglects to make the proper year-end adjustment for the expired insurance:

	net income and assets will be understated by $10,000
	net income and assets will be understated by $50,000
	net income and assets will be overstated by $10,000
	net income and assets will be overstated by $50,000