1. On October 5, 2020, Trendz was sued for by a competitor for patent infringement. The lawsuit is for $1,000,000 however, the companys lawyer has identified that the lawsuit is likely to be settled in 2021 for an amount between $10,000 and $30,000, with an 80% likelihood of $23,000. Prepare the journal entry for the year ended December 31, 2020. Also, provide any note disclosure that is required.

6. On December 31, 2020, Trendz financial statements showed a $200,000 bank loan payable that was due on January 10, 2021. On the due date, the company paid $50,000 cash and issued shares for the rest of the loan. Assume that the financial statements will be published on January 31, 2021. How would this bank loan be shown on Trendz financial statements for the year ended December 31, 2020? Explain your answer. [No journal entry is needed for this part.]

7. During December, Trendz purchased on account $50,000 of inventory from an Ontario supplier that charged 13% Ontario HST. This inventory was sold for $80,000 cash to a customer in a province with 5% GST and 7% PST. Prepare the journal entries for the purchase and sale of these goods.

8. On August 1, 2020, Trendz issued 1,000 common shares in exchange for advertising in a local newspaper. The regular cost for similar advertising was $14,000. As a small privately owned company, Trendz most recent sale of shares had been three months earlier for $18. It was a difficult year for Trendz. Sales were not going well, and the company hoped that the additional advertising would help boost profitability. Prepare the journal entries for this transaction. Ignore GST/HST