Blackstone Cuisine operates a chain of Italian restaurants. The company makes very detailed strategic plans for the future. On October 1, 2019, Blackstone calculated that it would need to purchase 800,000 pounds of flour on January 1, 2021. Because of the fluctuations in the price of flour, on October 1 the company negotiated a special forward contract with Brickstone Bank for Blackstone Cuisine to purchase 800,000 pounds of flour on January 1, 2017, at a price of $9,600,000. The price of flour was $12 per pound on October 1. Brickstone Bank is receiving help from investment bankers who specialize in forecasting flour prices. These analysts are predicting a drop in flour prices between October 1, 2019, and January 1, 2021. On December 31, 2019, the price of a pound of flour is $15. On December 31, 2020, the price of a pound of flour is $9. The appropriate discount rate throughout this period is 10%.

Make all journal entries necessary for Blackstone Cuisine for 2019, 2020, and 2012 to record the forward contract and the purchase of the flour. For purposes of estimating future settlement payments under the forward contract, assume that the current price of flour is the best forecast of the future price.

October 1, 2019 Account Debit Credit December 31, 2019 Account Debit Credit December 31, 2020 Account Debit Credit Janurary 1, 2021 Account Debit Credit Janurary 1, 2021 Account Debit Credit Janurary 1, 2021 Account Debit Credit