Eastman Chemical's 2019 annual report stated that the company's liabilities for environmental contingent liabilities were $287 million and $296 million for 2019 and 2018, respectively.
a. Describe how the liabilities affected the basic accounting equation.
b. What accounting principle is being followed by Eastman Chemical? Explain.
c. As of the end of 2018, $25 million of the $296 million total was classified as a current liability. Assume that all of that was paid during 2019, and compute the environmental contingent liability accrued during 2019 by drawing a T-account and reconstructing to entries.