Kemper Company signed a long-term, non-cancelable purchase commitment with a major supplier to purchase raw materials in

Question:

Kemper Company signed a long-term, non-cancelable purchase commitment with a major supplier to purchase raw materials in 2023 at a cost of $1,000,000. At December 31, 2022, the raw materials to be purchased have a fair value of $950,000. Prepare any necessary December 31 entry.