MusclePros Lawsuit \ MusclePro is a (fictional) public company engaged in selling protein powders and other \ performance-enhancing supplements. In 20X2, MusclePro was sued by a supplier alleging that MusclePro did not pay \ invoices for services received, and seeking $8.2 million in damages. At 12/31/X2, MusclePro included an estimated \ loss of $2 million in its year-end financial statements. During Q2 20X3, MusclePro entered a settlement agreement, \ whereby MusclePro agreed to settle the suppliers claims by paying $3 million in installments, as follows: $1 mil- \ lion to be paid at 12/31/X3, $1 million at 12/31/X4, and $1 million at 12/31/X5. MusclePro is rated BBB by Fitch \ throughout this multi-year period. Assume you are on the accounting team for MusclePro. Describe the following: \ 1. \ How did MusclePro initially record its estimated loss as of 12/31/X2? \ 2. \ What entry is required at 6/30/X3 to reflect signature of the settlement agreement in MusclePros quarterly \ financial statements? \ 3. \ What entries are required at 12/31/X3, 12/31/X4, and 12/31/X5? \ 4. \ In what financial statement line item should the activity related to this agreement appear? \ 5. \ What disclosures is MusclePro required to make surrounding this claim and agreement?