Sound Audio manufactures and sells audio equipment for automobiles. Engineers notified management in December 2018 of a circuit flaw in an amplifier that poses a potential fire hazard. An intense investigation indicated that a product recall is virtually certain, estimated to cost the company $2 million. The fiscal year ends on December 31. Required: 1. Should this loss contingency be accrued & disclosed, only disclosed, or neither? 2. What loss, if any, should Sound Audio report in its 2018 Income statement? 3. What liability, if any, should Sound Audio report in its 2018 balance sheet? 4. Prepare any journal entry needed. Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 Should this loss contingency be accrued & disclosed, only disclosed, or neither? What loss and liability, if any, should ! Audio report in its 2018 income statement and balance sheet respectively? (Enter your answer in millions (I.e., 10,00 should be entered as 10).) Loss contingency Accrued & disclosed Loss 2,000,000 million Liability 2,000,000 million Reg 4 > Reg 1 to 3 Reg 4 Prepare any journal entry needed. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Enter your answers in millions (l.e., 10,000,000 should be entered as 10).). No Event Credit General Journal Loss product recall Liability product recall Debit 2,000,000 2,000,000 ( Reg 1 to 3