On May 1, Tommy Tenant paid Lucy Landlord $13,500 to rent a copy machine for 18 months. Prepare the following entries for Tommy Tenant:

• May 1 payment assuming it is recorded in a permanent account.
• December 31 adjusting entry

What is the impact on the financial statements if Tommy fails to make the December 31 adjusting entry [Overstated, Understated, OK]? You should be able to cut and paste and then complete the following: A= Liab= Eq= Rev= Exp= NI=