At December $31,2023,$ Pina & Novak Inc. $($P&N$)$ is involved in a lawsuit.

$($a$)$

Under existing standards in IAS $37,$ prepare the December $31$ entry assuming it is probable $($and very likely$)$ that P&N will be liable for $$650,000$ as a result of this suit. $($Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts.$)$

Account Titles and Explanation

Debit

Credit