During the year 2016, the Mason Corporation was named as a defendant in a suit for damages by the Daley Company for breach of contract. An adverse decision to the Mason Corporation was rendered and the Daley Company was awarded $7,500,000 damages. At the time of the audit, the case was under appeal to a higher court. 1. 2. On December 23, 2016, the Mason Corporation declared a common stock dividend of 6,000 shares with a par value of $2,400,000 of its common stock, payable February 2, 2017, to the common stockholders of record December 30, 2016. The Mason Corporation has guaranteed the payment of interest on the 10-year, first mortgage bonds of the Nunu Company, an affiliate. Outstanding bonds of the Nunu Company amount to $800,000 with interest payable at 4% per annum, due June 1 and December 1 of each year. The bonds were issued by the Nunu Company on December 1, 2014, and all interest payments have been met by that company with the exception of the payment due December 1, 2016. The Mason Corporation states that it will pay the defaulted interest to the bondholders on January 15, 2017 3