On October 1, 2016, Smith Service Company paid $5,000 in ren

On October 1, 2016, Smith Service Company paid $5,000 in rent for the next five months, beginning with October 2016. On that date, Smith debited Prepaid Rent and credited Cash

If Smith fails to make an adjusting entry on December 31, 2016, indicate the effect on assets, liabilities, equity, and net income.

Understated, Overstated, No Effect
Assets
Liabilities
Equity
Net Income

What will be an ideal response

ANSWER

Understated, Overstated, No Effect
Assets Overstated
Liabilities No Effect
Equity Overstated
Net Income Overstated