Question

On October 6, 2021, the Elgin Corporation signed a purchase commitment to purchase inventory for $81,000 on or before March 31, 2022. The company's fiscal year-end is December 31. The contract was exercised on March 21, 2022, and the inventory was purchased for cash at the contract price. On the purchase date of March 21, the market price of the inventory was $61,000. The market price of the inventory on December 31, 2021, was $70,00o. The company uses a perpetual inventory system. Required: 1. Prepare the necessary adjusting journal entry (if any is required) on December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2.Prepare the journal entry to record the purchase on March 21, 2022. (If no entry is required for a transaction/event, select "No journel entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 Record any necessary adjusting entry related to the purchase commitment.

Answer 1

December 31,202) Cmmitmaut prilo 3l121 &<I০OO Prite on H0000 Loss un punchase cmmilmel 11000 liabilhy m puthae commi lmal $11000 purc ha of invealory March 21, 2023 Toxeatory Purchase cownmitonad iobihy1 t000 loss purthare Comitman #61000 $9000 A ccounts R1000 able pay $S/000 to uo Supplie we have to pex the commthnond made as $2D000 to tal Loss pinchase is