You are auditing your client, Red Company, for the fiscal year ended December 31, year 2. You found three situations that might or might not need an adjusting journal entry. Required For each situation: Prepare the proposed Adjusting Journal Entry you would make (if one is necessary) for the three situations below: GENERAL LEDGER ACCOUNT: Accounts Payable Accounts Receivable Accrued Liabilities Accumulated Depreciation Cash Cost of Goods Sold Income Tax Expense Interest Expense Inventory Operating Expenses Other Income Sales Service Revenue Unearned Revenue OR No Entry Needed Situation #1: Red Company shipped merchandise to a customer with a carrying value of $75,000, f.o.b. destination on December 23, year 2. Red Company recorded the sale and relief of the inventory on that date. The customer received the merchandise on December 31, year 2. The merchandise has a gross profit of 10%. Record the necessary year 2 adjusting journal entry, if any. GENERAL LEDGER ACCOUNT FROM ABOVE DEBIT CREDIT Situation #2: Red Company shipped merchandise with a carrying amount of $45,000 to a Consignee on December 24, year 2 and recorded the sale and the relief of inventory on that date. The Consignee had NOT sold the merchandise on January 5, year 3. The merchandise has a gross margin of 10%. Record the necessary year 2 adjusting journal entry, if any. GENERAL LEDGER ACCOUNT FROM BELOW DEBIT CREDIT Situation #3: Red Company entered into a three-year contract to provide services at $30,000 per year. The contract was for $90,000 in total and began at the beginning of year 2. Red Company will provide service on this contract continuously over the three-year period. The contract was paid in full by the customer on January 1, year 2 and the entire contract was recorded to revenue on that date. Record the necessary year 2 adjusting journal entry, if any. GENERAL LEDGER ACCOUNT FROM BELOW DEBIT CREDIT