On February 5, year 3, an employee filed a $2,000,000 lawsuit against Steel Co, for damages suffered when one of Steel's plants exploded on December 29. year 2 . Steel's legal counsel expects the company will lose the lawsuit and estimates the loss to be between $500,000 and $1,000,000. The employee has offered to settle the lawsuit out of court for $900,000, but Steel will not agree to the settlement In its December 31 year 2 balance sheet, what amount should Steel report as liability from lawsuit? $1,000,000 $500,000 $900,000 $2,000,000