A furniture company enters into a non-cancellable purchase contract with a supplier on 1 November 20X5. The contract requires the company purchase 480,000 metres of fabric at $0.60 per metre in 20X6. At the end of 20X5, the replacement cost for fabric is $0.45 per metre. The company is required to fulfil the contract, and cannot cancel.

Required:

Prepare the journal entry to record the onerous contract