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    TracyPete21's Avatar
    TracyPete21 Posts: 2, Reputation: 1
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    #1

    Jan 17, 2011, 09:50 AM
    Accounting question
    Another question not directly answered by my book...
    Settled a product liability lawsuite with a customer for $68,000 payable in January. Emerald Company accruded the loss in a litigation claims payable account.

    How do I journalize this?
    Just Looking's Avatar
    Just Looking Posts: 1,610, Reputation: 480
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    #2

    Jan 18, 2011, 06:34 PM

    Credit that payable account and debit an expense account for litigation.

    When the payment is actually made, the payable account will be debited and Cash will be credited.
    mariloursaberon's Avatar
    mariloursaberon Posts: 4, Reputation: 1
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    #3

    Feb 13, 2011, 09:34 PM
    When already paid

    Litigation Expense 68,000
    Litigation claims payable 68,000

    Just close your liablility account and recognize the expense
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