Intermediate Accounting II

During Year 9, Born Loser Co. was in the midst of fighting a lawsuit, and it seems highly probable that it will win. However, irrespective of the remote chance of losing, it guaranteed to pay for any liability that will result from losing the case. If necessary, how should Born Loser Co. report this situation for Year 9? A It should record a journal entry to accrue the loss since there is a guarantee. B It should disclose this contingency in the footnotes to the financial statements. C It need not record any accrual nor disclosure since losing is remote. D It should record an accrual of the loss and disclose it in the footnotes to the financial statements.