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The unadjusted trial balance of the Manufacturing Equitable at December 31, 2024, the end of its fiscal year, included the following account balances. Manufacturing's 2024 financial statements were issued on April 1, 2025. Other information: a. The bank notes, issued August 1, 2024, are due on July 31, 2025, and pay interest at a rate of 12%, payable at maturity. b. The mortgage note is due on March 1, 2025. Interest at 11% has been paid up to December 31 (assume 11% is a realistic rate Manufacturing intended at December 31, 2024, to refinance the note on its due date with a new 10-year mortgage note. In fac on March 1, Manufacturing paid $385,000 in cash on the principal balance and refinanced the remaining $1,020,000. c. Included in the accounts receivable balance at December 31, 2024, were two subsidiary accounts that had been overpaid an had credit balances totaling $18,550. The accounts were of two major customers who were expected to order mor merchandise from Manufacturing and apply the overpayments to those future purchases. d. On November 1, 2024, Manufacturing rented a portion of its factory to a tenant for $34,800 per year, payable in advance. Th payment for the 12 months ended October 31, 2025, was received as required and was credited to deferred revenue. Required: 1. Prepare any necessary adjusting journal entries at December 31,2024 , pertaining to each item of other information (a-d). 2. Prepare the current and long-term liability sections of the December 31,2024 , balance sheet. Eastern Manufacturing is involved with several situations that possibly involve contingencies. Each is described below. Eastern's fiscal year ends December 31, and the 2024 financial statements are issued on March 15, 2025. a. Eastern is involved in a lawsuit resulting from a dispute with a supplier. On February 3, 2025, judgment was rendered against Eastern in the amount of $126 million plus interest, a total of $141 million. Eastern plans to appeal the judgment and is unable to predict its outcome though it is not expected to have a material adverse effect on the company. b. In November 2023, the State of Nevada filed suit against Eastern, seeking civil penalties and injunctive relief for violations of environmental laws regulating hazardous waste. On January 12, 2025, Eastern reached a settlement with state authorities. Based upon discussions with legal counsel, the Company feels it is probable that $159 million will be required to cover the cost of violations. Eastern believes that the ultimate settlement of this claim will not have a material adverse effect on the company. c. Eastern is the plaintiff in a $219 million lawsuit filed against United Steel for damages due to lost profits from rejected contracts and for unpaid receivables. The case is in final appeal and legal counsel advises that it is probable that Eastern will prevail and be awarded $130 million. d. At March 15, 2025, Eastern knows a competitor has threatened litigation due to patent infringement. The competitor has not yet filed a lawsuit. Management believes a lawsuit is reasonably possible, and if a lawsuit is filed, management believes damages of up to $52 million are reasonably possible. Required: 1. Determine the appropriate way to report each situation. 2. Prepare the appropriate journal entries for these situations