A Company Has Been Sued for Product Failures Allegedly Resulting

Multiple Choice

A company has been sued for product failures allegedly resulting in injuries to the individuals bringing the lawsuit. The company's lawyers believe it is probable that the lawsuit will result in an actual liability of approximately $100,000. Which of the following entries should be made?

A)
$$\begin{array} { | l | l | l | l | } \hline \text { Loss on lawsuit } & & 100,000 & \\\hline & \begin{array} { l } \text { Estimated lawsuit loss } \\\text { payable }\end{array} & & 100,000 \\\hline\end{array}$$
B)
$$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 100,000 & \\\hline & \text { Loss on lawsuit } & & 100,000 \\\hline\end{array}$$
C)
$$\begin{array} { | l | l | l | l | } \hline \begin{array} { l } \text { Estimated lawsuit loss } \\\text { payable }\end{array} & & 100,000 & \\\hline & \text { Cash } & & 100,000 \\\hline\end{array}$$
D)
$$\begin{array} { | l | l | l | l | } \hline \text { Loss on lawsuit } & & 100,000 & \\\hline & \text { Cash } & & 100,000 \\\hline\end{array}$$