In an examination of the Marco Corporation as at December 31, 19X2, you have learned that the following situations exist. No entries in respect thereto have been made in the accounting records.

1. The Marco Corporation has guaranteed the payment of interest on the ten-year, first-mortgage bonds of the Newart Company, an affiliate. Outstanding bonds of the Newart Company amount to \(\$ 150,000\) with interest payable at 5 percent per annum, due June 1 and December 1 of each year. The bonds were issued by the Newart Company on December \(1,19 X 0\) and all interest payments have been met by that company with the exception of the payment due December 1, 19X2. The Marco Corporation states that it will pay the defaulted interest to the bondholders on January \(15,19 \times 3\).

2. During the year \(19 X 2\), the Marco Corporation was named as a defendant in a suit for damages by the Dalton Company for breach of contract. An adverse decision to the Marco Corporation was rendered and the Dalton Company was awarded \(\$ 40,000\) damages. At the time of the audit, the case was under appeal to a higher court.

3. On December 23, 19X2, the Marco Corporation declared a common stock dividend of 1,000 shares, par \(\$ 100,000\), of its common stock, payable February 2, 19X3 to the common stockholders of record December \(30,19 \times 2\).

Required:
What entries would you recommend and what disclosures, if any, would you make of these situations in the financial statements for December 31, 19X2?