Harrington Company was sued by an employee in late 2017. General counsel concluded that there was an 75 percent probability that the company would lose the lawsuit. The range of possible loss is estimated to be $22,000 to $75,000, with no amount in the range more likely than any other. The lawsuit was settled in 2018, with Harrington making a payment of $68,000. Assume that a U.S.based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes.

Required: Prepare the entry(ies) that Harrington would make on the December 31, 2017, and December 31, 2018, conversion worksheets to convert U.S. GAAP balances to IFRS. Journal entry worksheet

** I got the rest of it, just part B and this is what the question said I had right, but retained earning confused me**

Litigation loss

Litigation liability

Retained Earnings

Litigation liability