The following selected transactions relate to contingencies of Butler Products Incorporated, which began operations in July 2024. Butler's fiscal year ends on December 31. Financial statements are published in April 2025. 1.Butler offers a one-year warranty against manufacturer's defects for all its products. Industry experience indicates that warranty costs will approximate 3% of sales. Actual warranty expenditures were $5.5 million in 2024 and were recorded as warranty expense when incurred. 2.In December 2024, Butler became aware of an engineering flaw in a product that poses a potential risk of injury. As a result, a product recall appears inevitable. This move would likely cost the company $3.5 million. 3.Butler is the plaintiff in a $42.0 million lawsuit filed against a customer for costs and lost profits from contracts rejected in 2024. The lawsuit is in final appeal and attorneys advise that it is virtually certain that Butler will be awarded $32.0 million. Required: 8 points Prepare the appropriate journal entries that should be recorded as a result of each of these contingencies.