Arrow Industries was sued for infringing Masco Industries' patent No. 675X in August of 2020....
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Arrow Industries was sued for infringing Masco Industries' patent No. 675X in August of 2020. Arrow's lawyers believed it was probable it was going to lose and estimated damages were $2,000,000 to $5,000,000. They also believed the low end of the range was more likely-than-not. Arrow's year-end is December 31. On April 30, 2021, after Arrow's 2020 financial statements were issued, the plaintiff accepted a cash settlement of $2,500,000. Arrow Industries paid the liability next day. 1. Show, in good form, the journal entry made to record the settlement. (25 points)
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