Bread Basket Provides Baking Supplies to Restaurants and Grocery Stores

Bread Basket provides baking supplies to restaurants and grocery stores.On November 1, 2011, Bread Basket signed a €500,000, 6-month note payable.The note requires Bread Basket to pay interest at an annual rate of 12%.Bread Basket's accountant is a recent college graduate who lacks practical experiences.Therefore, the appropriate adjusting entry is not made.What is the impact on its December 31, 2011 statement of financial position?

A) Assets are overstated by € 30,000.
B) Equity is overstated by € 30,000.
C) Liabilities are understated by € 30,000.
D) Liabilities are understated by € 10,000.