The balance in the unearned rent account for Jackson Co. as of December 31 is $1,500. If Jackson Co. failed to record the adjusting entry of $500 of rent earned in December, the effect on the balance sheet and income statement for December would be

a. liabilities overstated $1,000; net income overstated $1,000.

b. assets understated $500; net income overstated $500.

c. liabilities overstated $500; net income understated $500.

d. liabilities understated $500; net income understated $500