5. Moe Company paid $12,000 cash in advance for a one-year insurance policy on August 1, Year 3. The company recorded this purchase as prepaid insurance. If the company fails to make the appropriate adjusting entry on December 31, Year 3, which of the following is true? a. Assets will be overstated by $12,000. b. Assets will be overstated by $7,000. C. Equity will be understated by $12,000. d. Equity will be overstated by $5,000