Problem $11-25($Static$)($LO $11-9)$

Harrington Company was sued by an employee in late $2020.$ General counsel concluded that there was an $80$ percent probability that

the company would lose the lawsuit. The range of possible loss is estimated to be $$20,000$ to $$70,000,$ with no amount in the range

more likely than any other. The lawsuit was settled in $2021,$ with Harrington making a payment of $$60,000.$

Assume that Harrington Company is a U$.$S$.-$based company that is issuing securities to foreign investors who require financial

statements prepared in accordance with IFRS. Thus, adjustments to convert from U$.$S$.$ GAAP to IFRS must be made. Ignore income

taxes.

Required:

a$.$ Prepare journal entries for this lawsuit for the years ending December $31,2020,$ and December $31,2021,$ under $(1)$ U$.$S$.$ GAAP and $(2)$

IFRS.

b$.$ Prepare the entry$($ies$)$ that Harrington would make on the December $31,2020,$ and December $31,2021,$ conversion worksheets to

convert U$.$S$.$ GAAP balances to IFRS.

Complete this question by entering your answers in the tabs below.

Prepare journal entries for this lawsuit for the years ending December $31,2020,$ and December $31,2021,$ under $(1)$ U$.$S$.$ GAAP and $(2)$

IFRS. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.$)$

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