Please choose the appropriate letter for each question. Thanks!

E10-12A. Contingent Liabilities Determine which of the following transactions represent contingent liabili- ties for Hermani Rental and indicate the proper accounting treatment at the company's fiscal year end, by placing the letter of the correct accounting treatment in the space provided A. Accrue a liability and disclose in the financial statement notes B. Disclose in the financial statement footnotes only C. No disclosure 1. Hermani Rental cosigned a loan for $75,000 due in one year for Wyler Company. Wyler is a very profitable company and is very liquid, making it a remote chance Hermani will have to pay the loan. 2. One of Hermani's rental tents collapsed at a wedding and injured the bride and groom. Hermani's legal counsel believes it is probable that Hermani will have to pay damages of $400,000. 3. Hermani Rental is being audited by the Internal Revenue Service. lts tax returns for the past two years are being examined. At the company's year-end, the audit is still in process. Hermani's CPA believes that payment of significant taxes is possible