Skill Hardware is the plaintiff in a $16 million lawsuit filed against a supplier. The litigation is in final appeal, and legal counsel advises that it is virtually certain that Skill will win the lawsuit and be awarded $12 million, which is an amount that is material to Skill. How should Skill account for this event?
a) Debit Legal Fees, Credit Accounts Payable
b) Debit Lawsuit Settlement Expense, Credit Cash
c) Debit Lawsuit Settlement Revenue, Credit Lawsuit Liability
d) Debit Lawsuit Settlement Revenue, Credit Cash