Answers that receive full credit should be:
well organized, use data inputs and use Excel features to make calculations.

E3

In December, a firm contracted to purchase 200 units of prefabricated housing walls at $4,000 per wall.

The contract is neither cancelable nor subject to revision. By December 31, the market price per wall had dropped to $3,900.

In January, at the payment date, the market price of the prefabricated housing walls decreased to $3,850, the following entry would be made:

Prepare the adjusting entry at December 31 and the January journal entry reflecting payment and the market price decrease.