Exercise 8-14 (Algo) Determine proper treatment of a contingent liability (LO8-5) Mississippi Cruise Lines is a...

Transcribed Image Text:

Exercise 8-14 (Algo) Determine proper treatment of a contingent liability (LO8-5) Mississippi Cruise Lines is a defendant in litigation involving a swimming accident on one of its three cruise ships. Required: 1. The likelihood of a payment occurring is probable, and the estimated amount is $1.10 million. 2. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $0.90 to $1.10 million. 3. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.10 million. 4. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.10 million. Record the necessary entry for the scenarios given above. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.) View transaction list Journal entry worksheet 1 2 3 4 Record the contingent liability, if necessary, if the likelihood of a payment occurring is probable, and the estimated amount is $1.10 million. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Contingent Liability Record entry Clear entry View general journal Exercise 8-14 (Algo) Determine proper treatment of a contingent liability (LO8-5) Mississippi Cruise Lines is a defendant in litigation involving a swimming accident on one of its three cruise ships. Required: 1. The likelihood of a payment occurring is probable, and the estimated amount is $1.10 million. 2. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $0.90 to $1.10 million. 3. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.10 million. 4. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.10 million. Record the necessary entry for the scenarios given above. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.) View transaction list Journal entry worksheet 1 2 3 4 Record the contingent liability, if necessary, if the likelihood of a payment occurring is probable, and the estimated amount is $1.10 million. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Contingent Liability Record entry Clear entry View general journal