Prepare Journal Entries, If Needed, for the Following Scenarios

Essay

Prepare journal entries, if needed, for the following scenarios:
1)Token Company is involved in a lawsuit with Bednam Industries for faulty parts. Token Company is not sure whether they need to journalize a transaction for the amount. Token Company's attorney has stated that it is probable that Token Company will lose the lawsuit and be expected to pay $2 million in damages.
2)Highlights Salon is involved in a lawsuit with Key Color. Highlights' attorney has stated that it is probable that Highlights will win $150,000.
3)Kepler Industries is involved in a lawsuit. Kepler Industries is expected to lose the lawsuit and pay $1.2 million. The probability of loss is very high.