Merlough Pharmaceuticals, Inc. is involved in various lawsuits regarding product liability, commercial liability, and other matters that arise from time to time in the ordinary course of business. The lawsuits pending at the beginning of the year and those filed in the current years are detailed below. (Click the icon to view the lawsuits.) Read the requirements. Requirements a and b. Explain how each of the lawsuits is accounted for under U.S. GAAP and prepare any journal entries required at the end of the year Pending Lawsuit at the Beginning of the Year 1. Product liability lawsuit related to eeya, a p a maceutical ug, which aimants seek substantial damages. Merlough's attorneys assess the likelihood of losing the la estimated loss ranged from $490,000 to $1,515,000. At the end of the year, the attorney's assessment of the loss increased to a range between $740,000 and $2,015,000. suit as easonably possible at 55%. At the begin ing of the year, the Explain the accounting for the first lawsuit by answering the questions in the table below. (Complete all answer boxes.) Does a Type of Likelihood Record Footnote disclosure contingency exist? of occurance (accrue)? required? Prepare the journal entry below if required at the end of the year for the first pending lawsuit. (Record debits first, then credits. Exclude explanations from any journal entries. If no entry is required select "No Entry Required" on the first line of the journal entry table and leave all remaining cells in the table blank.) Account December 31, Current Year