The Hospital is the defendant in a malpractice suit. Attorneys for the Hospital are confident that the Hospital will be found liable and that the best estimate of the amount of the loss is $1,500,000. The Hospital carries medical Malpractice insurance with a $500,000. How much should the Claim Expense be reported on the Financial

Statement for that year?

		$500,000
		$1,000,000
		$1,500,000
		Disclose the nature of the contingency and estimate the possible loss only.