Cullumber Co. uses titanium in the production of its specialty drivers. Cullumber anticipates that it will need to purchase 220 ounces of titanium in November 2017, for clubs that will be sold in advance of the spring and summer of 2018. However, if the price of titanium increases, this will increase the cost to produce the clubs, which will result in lower profit margins. To hedge the risk of increased titanium prices, on May 1, 2017, Cullumber enters into a titanium futures contract and designates this futures contract as a cash flow hedge of the anticipated titanium purchase. The notional amount of the contract is 220 ounces, and the terms of the contract give Cullumber the option to purchase titanium at a price of $550 per ounce. The price will be good until the contract expires on November 30, 2017. Assume the following data with respect to the price of the call options and the titanium inventory purchase. Date Spot Price for November Delivery May 1, 2017 $550 per ounce June 30, 2017 572 per ounce September 30, 2017 578 per ounce Present the journal entries for the following dates/transactions. (a) May 1, 2017Inception of futures contract, no premium paid. (b) June 30, 2017Cullumber prepares financial statements. (c) September 30, 2017Cullumber prepares financial statements. (d) October 5, 2017Cullumber purchases 220 ounces of titanium at $578 per ounce and settles the futures contract. (e) December 15, 2017Cullumber sells clubs containing titanium purchased in October 2017 for $234,000. The cost of the finished goods inventory is $139,000.