Sunland Company has a loss contingency. The company's legal council's opinion is that the contingency is probable and that they estimate that the amount of the loss will be $$597000.$ What is the proper accounting treatment for this contingency?

The amount is neither accrued nor disclosed.

Only the amount of $$597000$ should be disclosed in the notes to the financial statements.

There is not enough information given to determine the accounting treatment.

$$597000$ should be accrued as a liability.