Orange, Co. is being sued by a customer related to a faulty…
Orange, Co. is being sued by a customer related to a faulty product. While the outcome of the lawsuit is unknown as of December 31, 2020, in consultation with their legal team, Orange, Co. believes that it is probable they will incur a loss and the best estimate of the loss is $750,000. Select the correct adjusting journal entry that Orange Co. should make as of December 31, 2020: