During 2016, Boge Corporation signed a noncancelable contract to purchase 10,000 bushels of soybeans at $5 per bushel with delivery to be made in 2017. On December 31, 2016, the price of soybeans had fallen to $4.50 per bushel. On May 1, 2017, Boge takes delivery of the soybeans when the price is $4.75 per bushel.

Required:

Prepare the journal entries required on December 31, 2016, and May 1, 2017.