Can someone provides an explicit response to this question please? Thanks,

A company has a fiscal year-end of December 31: (1) on October 1, $16,000 was paid for a one-year fire insurance policy; (2) on June 30 the company lent its chief financial officer $14,000; principal and interest at 8% are due in one year; and (3) equipment costing $64,000 was purchased at the beginning of the year for cash. Depreciation on the equipment is $12,800 per year. If the adjusting entries were not recorded, would net income be higher or lower and by how much?