(TCO D) Tender Foot, Inc. is involved in litigation regarding a faulty product sold in a prior year. The company has consulted with its attorney and determined that it is possible that it may lose the case. The attorneys estimated that there is a 40% chance of losing. Tender Foots attorney estimated that if it loses, then the amount of any payment would be $500,000. What is the required journal entry as a result of this litigation? (Points : 5)

a.Debit Litigation Expense for $500,000 and credit Litigation Liability for $500,000.

b. No journal entry is required.

c. Debit Litigation Expense for $200,000 and credit Litigation Liability for $200,000.

d. Debit Litigation Expense for $300,000 and credit Litigation Liability for $300,000