1. In the case of Formula One, we learned that a securitization changes the structure of its underlying assets. By and large, the new securities created by securitization have market values that differ from the values of the old assets. Lets assume Formula One Management (FOM), a subsidiary wholly owned by the Ecclestone family, generated revenues from setting up the races to shipping the cars to merchandising, and had accumulated $2.5 billion account receivables (A/Rs) recorded on the books at historical basis. And Mr. Ecclestone of the FOM called on Mr. X, his financial advisor, for his suggestions about the possible securitization of FOMs A/Rs. Mr. X showed Mr. Ecclestone three scenarios that would differ in terms of the financial market conditions as a whole.

1. The first scenario was to sell 50% of the A/Rs with a market value 20% higher than the book value. Apparently the first scenario was not a securitization transaction. But it would definitely generate profits for Ecclestone to boost FOMs earnings immediately.
2. The second scenario was to securitize 80% of its A/Rs and FOM would receive a combination of various assets, including cash, interest only strips, residual classes and servicing contracts. FOM would receive 80% of its sold A/Rs in cash and estimated that the fair market value (FMV) of the servicing contracts was $20 million and the FMV of the residual class was ten times that of the servicing contracts. And the FMV of the interest-only strip was 1.5 times that of the residual class.
3. The third scenario, however, would make FOM more profitable due to a booming economy. FOM could securitize 90% of its A/Rs and received 60% of its A/Rs in cash in order to benefit from even higher FMV by retaining more assets. In this scenario, the FOM of the servicing contracts was $25 million, which was a little higher than in the second scenario. But, the FMV of the residual class was reaching 20 times that of the servicing contracts and the FMV of the interest-only strip was 1.5 times that of the residual class.

Please show the necessary journal entries and adjustments for the three scenarios to reflect the possible profits that were created from nothing.