VMR Company is a car manufacturer which recently discovered it had manufacturing defects and issued a recall but not until a series of accidents were already experienced by some customers who then sued VMR for damages. VMR's financial statement date is at the end of the calendar year. It is unclear if VMR's defect is actually at fault so the Management of VMR reaches out to their legal counsel for their professional opinion on the potential outcome. Assuming their legal department provides Management with a prediction of the litigation as having a remote likelihood of losing the lawsuit and an estimated loss amount of $16,000,000, what liability, if any, should be accrued related to this lawsuit? What is the journal entry to record this loss contingency, if a journal entry is required? Does the situation described meet the conditions to require a disclosure note in VMR's financial statements?