On October 1, 2008, Gore Electronics Inc. entered into a 6-month, $520,000 purchase commitment for a supply

Question:

On October 1, 2008, Gore Electronics Inc. entered into a 6-month, $520,000 purchase commitment for a supply of product A. On December 31, 2008, the market value of this material had fallen to $421,500. Make the journal entries necessary on December 31, 2008, and on March 31, 2009, assuming that the market value of the inventory on March 31 is $390,000.