1. A customer who purchased helium balloons from P³ has sued for $1,000,000 because some of the balloons burst and the customers dogs were frightened and will now no longer go near anything that even resembles a balloon, such as balls or round lawn ornaments. The customer has had their two dogs in therapy but to no avail as the dogs are still frightened of round objects. The P³ legal team believes that it is likely that P³ will lose somewhere between $50,000 and $250,000. The customer has offered to settle for $750,000.

2. P³ has entered a lawsuit against one its former suppliers who failed to deliver goods as ordered and failed to either reimburse P³ for the goods or to replace the goods. The faulty products resulted in lost sales to P³ of $950,000 as well as damage to P³ s reputation thus P³ is seeking damages in the amount of $2,000,000. P³ s legal team believes P³ and the customer will reach an out of court settlement and estimates the range of the settlement to be between $750,000 and $1,200,000 but believes that $1,000,000 would be the most likely settlement.

Prepare journal entries for P³