Basset Company was recently sued by several of its customers. Bassets legal counsel has determined that it is possible that Basset will lose the case and, if they do lose, the amount of the loss would be between $60,000 and $150,000. How would Basset record this possible loss on their balance sheet?

a) They would accrue a liability of $150,000 and disclose that the low end of the loss is $60,000.

b) They would not record anything since the lawsuit has not yet been settled.

c) They would only make a note disclosure of the loss.

d) They would accrue a liability of $60,000 and disclose that the loss could be as high as $150,000.