9.In April, your calendar year company pays $1,200 for 1 years rent that you recorded in Prepaid Rent. If you do not record an adjusting entry at year end, how will the financial statements be affected?

Net incomeAssets

a.overstatedoverstated

b.overstatedunderstated

c.understatedoverstated

d.understatedunderstated

10.On August 1, 20X8, your calendar year firmtakes out a 3-year insurance policy at a total cost of$3,600 that requires a 50% down-payment and the remainder after 6 months. Insurance expense for 20X8is:

a.$500

b.$600

c.$1,200

d.$1,800