Buchanan company recently was sued by a competitor for patent infringement. attorneys have determined that it is probable that buchanan will lose the case and that a reasonable estimate of damages to be paid by buchanan is $305,090. in light of this case, buchanan is considering establishing a $112,720 self-insurance allowance.

what entry, if any, should buchanan record to recognize this loss contingency? (if no entry is required, select "no entry" for the account titles and enter 0 for the amounts. credit account titles are automatically indented when amount is entered. do not indent manually.)

account titles and explanation

debit

credit