Marathon Petroleum Inc. commenced operations on January 2, 2023, and has a year-end of December 31. It operates an oil refinery located on the Seaway and a chain of 36 gasoline stations in eastern Canada. It is privately owned and reports under IFRS. The refinery supplies gasoline and home heating oil retailers as well as all the gasoline stations it owns. Most of the capital came from a single bond issue due January 2, 2033, (10-year, $200 million face value, 6% coupon, issued to yield 8%) on which interest is paid semi-annually, and through shares issued to the owners ($40 million). A 7% note payable for $40 million to a bank was also issued in 2023, due in May 2025. Retained earnings was $15 million as at December 31, 2023, and no dividends were paid that year.You work for a mid-sized CPA firm in Toronto and have been asked by a partner to look into the accounting by Marathons accounting team. The controller, Tom Tesarski, CPA, is concerned about the loan covenants included on the debt issue and whether the financial results for the 2024 fiscal year will fall short of their requirements. Specifically, it requires that, beginning with the fiscal year ended December 31, 2024, the following loan covenants need to be met: The long-term debt-to-equity ratio must not exceed 4:1.Times interest earned must exceed 2 times.The draft 2024 earnings are an improvement over last years: net income after tax was $16 million with $4 million of dividends having been declared and paid.The following may impact the financial position and 2024 earnings: Tom mentions that, to simplify matters, he accounted for the bond interest using the straight 6% rate on the $200 million principal amount in 2024. The financial statements for 2023 were audited by your firm and the bond accounting to the end of that year was in accordance with IFRS.The refinery has a 30-year life starting in 2023. It was expected then that site restoration would cost $75 million and a separate property, plant, and equipment account for this decommissioning obligation was set up. A 6% discount rate was used to value the related liability. At the beginning of 2024, an external geo-technical evaluation showed that the eventual cost will be $90 million. Tom recorded the same amounts for 2024 as for 2023 for interest on the liability and depreciation, and otherwise did not update any accounting for the decommissioning obligation in 2024 nor did he include the impact if any from the revaluation of the liability.In December 2024, Marathon obtained an extension on the $40 million, 7% note payable to the bank with a new maturity date in 2026.Starting in February 2024, Marathon offered customers the option of buying a prepaid card for gasoline. The cards are loaded with gasoline dollars and offer a discount to encourage their popularity and to lock in future sales. For $100, a customer can obtain $115 in gas from one of Marathons gasoline stations. The notes made by the audit partner in your 2024 audit file state the proper accounting would be: When a card is sold, a liability for $115 is recognized; then when the card is used, the retail value of gasoline is credited to revenue. The $15 discount is included in promotion expense.Up to December 31, 2024, cards with a retail value (exchangeable for gasoline) of $12 million have been issued and gasoline with a retail value of $6.5 million has been paid for using the cards. It is expected that the remaining amount will be redeemed equally over the next two years to the end of December 2026.Required:You are a CPA working for a medium-sized CPA firm in Toronto and have been asked by your senior to draft a report to respond to Tom Tesarskis concerns