=+5. The balance in the unearned rent account for Jones Co.

as of December 31 is $1,200. IfJones Co. failed to re¬

cord the adjusting entry for $600 ofrent earned during December, the effect on the balance sheet and income statement for December would be:

A. assets understated by $600; net income overstated by $600.

B. liabilities understated by $600; net income under¬

stated by $600.

C. liabilities overstated by $600; net income under¬

stated by $600.

D. liabilities overstated by $600; net income overstated by $600.