The company specializes in speculating on the direction of movements in the price of gold. On December 1 of Year 1, the company entered into a futures contract to sell 100 ounces of gold at $1,119 per ounce on January 1 of Year 2. The company expected the price of gold to decline between December 1 and January 1. The market price of gold on December 1 of Year 1 was $1,119 per ounce. Make all journal entries necessary on December 31 of Year 1 in connection with the futures contract, assuming that the price per ounce of gold on December 31 is
(1) $1,050,
(2) $1,213,
(3) $1,119.