Concord Shoes Foot Inc. is involved in litigation regarding a faulty product sold in a prior year. The company has consulted with its attorney and determined that it is possible that they may lose the case. The attorneys estimated that there is a 45% chance of losing. If this is the case, their attorney estimated that the amount of any payment would be $793000. What is the required journal entry as a result of this litigation?

a. Debit Litigation Expense for $356850 and credit Litigation Liability for $356850.

b. Debit Litigation Expense for $436150 and credit Litigation Liability for $436150.

c. Debit Litigation Expense for $793000 and credit Litigation liability for $793000.

d. No journal entry is required.