Question: E8.11 (LO 2) (Purchase Commitments) Prater Company has had difficulty obtaining key raw materials for its manufacturing process. The company therefore signed a long-term, non-cancelable

E8.11 (LO 2) (Purchase Commitments) Prater Company has had difficulty obtaining key raw materials for its manufacturing process. The company therefore signed a long-term, non-cancelable purchase commitment with its largest supplier of this raw material on November 30, 2025, at an agreed price of $400,000. At December 31, 2025, the raw material had declined in price to $375,000.

Instructions What entry would you make on December 31, 2025, to recognize these facts?

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