aughn Company recently was sued by a competitor for patent infringement. Attorneys have determined that it is probable that Vaughn will lose the case and that a reasonable estimate of damages to be paid by Vaughn is $326,400. In light of this case, Vaughn is considering establishing a $107,700 self-insurance allowance. What entry, if any, should Vaughn record to recognize this loss contingency? (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)