The balance in the unearned rent account for Jones Co. as of December 31 is $1,200. If Jones Co. failed to record the adjusting entry for $600 of rent earned during December, the effect on the balance sheet and income statement for December would be:

a. assets understated $600; net income overstated $600.

b. liabilities understated $600; net income understated $600.

c. liabilities overstated $600; net income understated $600.

d. liabilities overstated $600; net income overstated $600.