For each separate situation, indicate whether Cruz Company should

$($a$)$ record a liability,

$($b$)$ disclose in notes, or

$($c$)$ have no disclosure.

Cruz Company guarantees the $$116,000$ debt of a supplier. It is not probable that the supplier will default on the debt.

A disgruntled employee is suing Cruz Company. Legal advisers believe that the company will likely need to pay damages, but the amount cannot be reasonably estimated.