What is the effect on the financial statements of recording a $15,000 repair expense as a debit to Machinery and a credit to Cash? Assets overstated, liabilities unaffected, stockholders' equity overstated, and net income overstated. Assets understated, liabilities unaffected, stockholders' equity understated, and net income overstated. Assets overstated, liabilities understated, stockholders' equity unaffected, and net income overstated. This entry has no effect on the financial statements