Cycling Company Inc., a bicycle manufacturer, is preparing its financial statements by December 31, 2020. The company has identified the following legal situations that can be classified as contingencies. 1. The company has discovered that a type of bicycle they have started manufacturing and selling in 2020 has some flaws in the handlebars. The company has sent a statement to newspapers and magazines offering to replace the handlebars. The company estimates a cost of $300,000 for these repairs. No court charges have been filed for damages caused by the defect. The company believes there is a reasonable possibility that claims for damages total $2,500,000 2. The company has an incinerator in the back of one of its stores that is used to burn cardboard boxes that are received on inventory shipments. In September 2020, the state environmental protection agency filed a lawsuit against the company for pollution. The company hopes not to use the incinerator anymore and start recycling. However, his lawyers believe that a fine of between $30,000 and $50,000 against the company is likely to be awarded. Lawyers can't predict the exact amount. Required: A. Using US GAAP, post the journal voucher as of December 31, 2020 and explain your reasoning. If the journal entry is not posted, explain how it should be disclosed in the company's annual report. B. Indicate how your response would change if the company uses IFRS