The following note accompanied recent financial statements for Goodyear Tire and Rubber Company:

Goodyear is a defendant in numerous lawsuits involving at December 31, 2002, approximately 62,000 claimants alleging various asbestos related personal injuries purported to result from exposure to asbestos in certain rubber coated products manufactured by Goodyear in the past or in certain Goodyear facilities. . . . In the past, Goodyear has disposed of approximately 23,500 cases by defending and obtaining the dismissal thereof or by entering into a settlement.

At December 31, 2002, Goodyear has recorded liabilities aggregating $229.1 million for potential product liability and other (asbestos) tort claims, including related legal fees expected to be incurred, presently asserted against Goodyear.

The portion of the recorded liabilities for potential product liability and other tort claims relating to asbestos claims is based on pending claims. The amount recorded reflects an estimate of the cost of defending and resolving pending claims, based on available information and our experience in disposing of asbestos claims in the past.

a. Provide a journal entry to record the contingent liability, assuming that all the liabilities for the 62,000 claimants were accrued on December 31, 2002.

b. Assume that $75 million was accrued on December 31, 2001, for the cases settled in 2002. Provide a summary journal entry for the settlements.

c. Why was the contingent liability accrued on December 31, 2002?