Consider the following transactions for Huskies Insurance Company:

1. Equipment costing $42,000 is purchased at the beginning of the year for cash. Depreciation on the equipment is $7,000 per year.

2. On June 30, the company lends its chief financial officer $50,000; principal and interest at 7% are due in one year.

3. On October 1, the company receives $16,000 from a customer for a one-year property insurance policy. Deferred Revenue is credited.

Required:

Indicate by how much net income in the income statement is higher or lower if the adjustment is not recorded. (Do not round intermediate calculations.)