1. On November 4, 2019 HEMI was sued for $50,000,000 in damages because one of its transmissions was incorrectly installed by Suncor repair technicians which resulted in significant property damage. HEMIs lawyers are of the opinion that the lawsuit is without any merit as the transmission supplied by HEMI was working properly. The problem was with the incorrect installation of the transmission. Suncor has no chance on wining this lawsuit. HEMI plans to defend itself through the Canadian legal system which may take as long as 3 years. The Accountant has recorded $50,000,000 in the general ledger accounts as Lawsuit liability and Damages from lawsuits expense. The Accountant wants you to explain the appropriate accounting treatment for this contingent loss and provide an adjusting journal entry, if any, to properly account this contingent loss (remember that the contingent loss is already recorded in HEMIs accounting records).