Pixies Inc. pays its rent of $54,000 annually on January 1. If the February 28 monthly adjusting entry for prepaid rent is omitted, which of the following will be true?

Select one:

A. Assets will be overstated by $9,000 and net income and stockholders' equity will be understated by $9,000.

B. Assets will be overstated by $4,500 and net income and stockholders' equity will be overstated by $4,500.

C. Failure to make the adjustment does not affect the February financial statements.

D. Expenses will be overstated by $4,500 and net income and stockholders' equity will be understated by $4,500.