4. On February 15, 2022, CHAS received notice that a customer may sue the company for $10 million. The lawsuit is based on an accident the customer had at the CHAS store on December 23, 2021. The claim has not been filed by the client. However, CHAS understands that the client is likely to sue, and the firm's legal counsel understands that the client is also likely to win the case. However, the amount estimated by the advisers is between $3.5 million and $6 million. CHAS closes its books on December 31 of each year. The 2018 10k report and annual report were released on March 25, 2019. How should CHAS record this event? As a loss in the Statement of Income and Expenses for 2021 for $6 million because it is the most conservative. b. As a loss in the 2022 Statement of Income and Expenses for $3.5 million. c. As a loss in the 2021 Statement of Income and Expenses for $3.5 million. d. As a note to the 2018 financial statements with no effect on the financial statements because the lawsuit has not yet been filed