M Omail YouTube Maps O ADJUSTINO ENTRIES III Effects of adjusting entries on financial statements: Problem typ... On September 1, Hernandez Company received $32,100 for six months of rent, in advance. Hernandez credited Rent Revenue, which is an alternate way of recording the initial receipt of cash. If the appropriate adjusting.entry is not made at the end of the year, what will be the effect on (a) Income statement accounts (overstated, understated, or no effect)? (b) Net Income (overstated, understated, or no effect)? (c) Balance sheet accounts (overstated, understated, or no effect)? Income Statement Accounts Revenue: Choose One Estense: Choose One Net Income: Choose One Balance Sheet Accounts Assets Understated Liabilities: Choose One Retained Earings: Choose One Explanation Check