On July 1 , Sanchez Company paid $14,400 for two years of insurance in advance. Sanchez debited Prepaid Insurance. 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)