Mejia Electronics has a line of credit at their bank of $$2$ million. The terms of the contract state that the company must have cash equal to at least $10\%$ of the borrowed amount in their bank account at all times. If Mejia borrowed $$1\mathrm{.}3$ million in $2020,$ the restricted cash used to secure the loan should be disclosed in the financial statements because it is a

Select answer from the options below

contingency.

Level $3$ financial instrument.

significant accounting policy.

contractual situation.