At December 31,2020, a firm is evaluating a contingent liability as part of their annual financial reporting. They consider the loss probable and expect to pay $400,000. One year later, the case is still on-going, and the firm expects that the loss is still probable and the most likely amount is $500,000. At December 31, 2021, the firm updates their estimate. The court case settles on May 31, 2022. The firm pays $425,000 to settle the case. What effect does the contingent liability have on net income in each year, respectively? O 2020: Reduce $400,000, 2021: No Effect, 2022: No Effect O 2020: Reduce $400,000, 2021: Reduce $100,000, 2022: Increase $25,000 O 2020: Reduce $400,000, 2021: Reduce $100,000, 2022: Increase $75,000 O 2020: No Effect, 2021: No Effect, 2022: No Effect O 2020: Reduce $400,000, 2021: Reduce $100,000, 2022: No Effect