1. Create the Journal Entry for: In August 2012, a worker was injured in an accident, partially as a result of his own negligence. The worker has sued the company for $1 million. Legal counsel believes it is reasonably possible that the outcome of the suit will be unfavorable, and that the settlement would cost the company from $270,000 to $630,000
2. Create the Journal Entry for: A suit for breach of contract seeking damages of $2,000,000 was filed by an author on October 4, 2012. Legal counsel believes an unfavorable outcome is probable. A reasonable estimate of the award to the plaintiff is between $1.3 million and $2.2 million. No amount within this range is a better estimate of potential damages than any other amount.