Red Seeder received notice from the provincial environment ministry that a site Blue Spruce had been using to dispose of waste was considered toxic, and that Red Seeder would be held responsible for its cleanup under provincial legislation. The vice-president, finance, discussed the situation over tea with the vice-president, engineering. The engineer stated that it would take up to three years to determine the best way to remediate the site and that the cost would be considerable, perhaps as much as $465,000 to $1.82 million or more. The engineering vice-president advocates recognizing at least the minimum estimate of $475,000 in the current years financial statements. The financial vice-president advocates just disclosing the situation, and the inability to estimate the cost, in a note to the financial statements.

Prepare the Journal Entry that should be recorded as at December 31, 2021 to recognize the situation