Waterway Corporation purchased a one$-$year insurance policy in January $2020$ for $$49440.$ The insurance policy is in effect from April

$2020$ through March $2021.$ If the company neglects to make the proper year$-$end adjustment for the expired insurance

net income and assets will be understated by $$8240.$

net income and assets will be overstated by $$37080.$

net income and assets will be understated by $$37080.$

net income and assets will be overstated by $$8240.$