The Commonwealth of Virginia filed suit in October $2022$ against Northern Timber Corporation, seeking civil penalties and injunctive relief for violations of environmental laws regulating forest conservation. When the financial statements were issued in $2023,$ Northern had not reached a settlement with state authorities, but legal counsel advised Northern Timber that it was probable the ultimate settlement would be $$1,700,000$ in penalties. The following entry was recorded:

General Journal Debit Credit

Loss$$litigation $1,700,000$

Liability$$litigation $1,700,000$

Late in $2024,$ a settlement was reached with state authorities to pay a total of $$1,160,000$ to cover the cost of violations.

Required:

Prepare any journal entry$($s$)$ related to the change.

Is Northern required to revise prior years$$ financial statements as a result of the change?

Is Northern required to provide a disclosure note to report the change?