In February 20X3, La Fondue Ltd. signed a two-year contract with a Quebec cheese supplier to provide a minimum of 1,000 kilograms of fine cheese for fondue at a fixed price of $20 per kilogram. By the end of September, La Fondue had purchased 650 kg at the agreed-upon price. By the end of October, the end of the fiscal year, the open market price of the cheese dropped to $17 per kg due to excess capacity in the dairy industry. On 27 November, La Fondue purchased 350 kg at the contract price of $20. The open market price was $18 at that time.

Required:

Prepare any journal entries that are necessary on La Fondue’s books to record the events in October and November.