"1. I was in prison for seven years," said Mr. Easton. "What do you mean?" asked Miss Fairchild. Mr. Easton answered, " Actually, I made fake money and was arrested by the police officer." "Really? What a pity!" said Miss Fairchild.

1. 'I was in prison for seven years," said Mr. Easton. "What do you mean?" asked Miss Fairchild. Mr. Easton answered, " Actually, I wasn't a police officer." "I knew it, but that's OK. People make mistakes." said Miss Fairchild.
   
2. "I was in prison for seven years," said Mr. Easton. "What do you mean?" asked Miss Fairchild. Mr. Easton answered, " Actually, I was a criminal who made fake money and was on the way to prison." "Really? What a shame!" said Miss Fairchild.
   

(Are all the passage grammatical and logical? Check them, please. Thank you.)