At December 31, 2025, Monty Company has outstanding noncancelable purchase commitments for 37,500 gallons, at $3.72 per gallon, of raw material to be used in its manufacturing process. The company prices its raw material inventory at cost or market, whichever is lower, and uses a perpetual inventory system. (b2) Your answer is partially correct. Assuming that the market price as of December 31, 2025, is $3.35, record the journal entry. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Dec. 31 Loss on Purchase Commitments Estimated Liability on Purchase Commitments Debit 125625 Credit 125625