George has the following potential liabilities:

Mark, a former employee, has sued George for $$1,060,000.$ George contacted his attorney, and the case is believed to be

frivolous.

$,$ Carter sued George for an undisclosed amount for a class action lawsuit. George thinks it's frivolous, but his attorneys indicate

a loss is probable for $$106,000.$

Kenneth sued George because he slipped outside of George's store. The claim is $$318,000$ and George is certain he will lose

the case but believes Kenneth will settle. The attorneys agree and based on conversations with Kenneth's attorneys, have

stated that it is remote the claim will be settled for $$307,400.$ Kenneth's attorneys indicated he would be willing to accept

either cash of $$291,500$ or shares of George's closely$-$held common stock currently valued at $$280,900.$ George would prefer

not to settle in cash.

$,$ George is suing Mark for $$318,000$ because Mark is in violation of a non$-$compete agreement he has with George. George is

certain he will win and so are his attorneys. In addition, Mark has privately admitted to George could be right, but Mark

intends to fight it$.$

None of the above have been settled as of December $31,2025.$ Prepare the necessary entry to record the liability and receivable, if

any, for the situations above. $($Credit account titles are automatically indented when the amount is entered. Do not indent

manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. List debit entry before

credit entry.$)$

Account Titles and Explanation

Debit

Credit

Interest Expense