On June 30, Riverboat Corporation leased equipment and treated it as a capital lease although it should have been accounted for as an operating lease. What effects will this error have on Riverboat's liabilities and net income for the year ending December 31?

	A.	Liabilities no effect; net income overstated
	B.	Liabilities overstated; net income understated
	C.	Liabilities understated; net income overstated
	D.	Liabilities understated; net income understated