On October 1, 2013, Sloan Oil Inc. entered into a 6-month, $650,000 purchase commitment for a supply

Question:

On October 1, 2013, Sloan Oil Inc. entered into a 6-month, $650,000 purchase commitment for a supply of oil. On December 31, 2013, the market value of oil had fallen to $563,000. Make the journal entries necessary on December 31, 2013, and on March 31, 2014, assuming that the market value of the inventory on March 31 is $430,000.