Brief Exercise 13-11 Crane Company recently was sued by a competitor for patent

Question

Brief Exercise 13-11 Crane Company recently was sued by a competitor for patent infringement. Attorneys have determined that it is probable that Crane will lose the case and that a reasonable estimate of damages to be paid by Crane is $288,700. In light of this case, Crane is considering establishing a $92,500 self-insurance allowance. What entry, if any, should Crane record to recognize this loss contingency? (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Account titles and explanation Debit Credit Litigation expense $288,700 Litigation liability $288,700

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