If I understand your requirements you should simply create a custom field single select with Yes and No as the options. I assume you will want to require the field to be updated maybe at create or as a transition as well. You may wish to set a default value (No?).
How can I go about having the field updated at creation or when transitioning?
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Two methods of using Classic project.
if you have not edited workflows and done this before I recommend this document- https://support.atlassian.com/jira-software-cloud/docs/what-are-jira-workflows/
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