Question

Pacific Cruise Lines is a defendant in litigation involving a swimming accident on one of its three cruise ships. Required: 1. The likelihood of a payment occurring is probable, and the estimated amount is $1.22 million. 2. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $1.02 to $1.22 million. 3. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.22 million. 4. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.22 million. Record the necessary entry for the scenarios given above. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.)

Answer 1

1.31-Dec

Dr Loss 1.22 million

Cr Contingent Liability 1.22 million

2.31-Dec

Dr Loss 1.02 million

Cr Contingent Liability 1.02 million

3. Disclosure Required

4. No Disclosure

Step-by-step explanation:

Pacific Cruise Lines Journal entry

1.31-Dec

Dr Loss 1.22 million

Cr Contingent Liability 1.22 million

2.31-Dec

Dr Loss 1.02 million

Cr Contingent Liability 1.02 million

3. Disclosure Required

4. No Disclosure