During the current fiscal year, Sandhill Corp. signed a long$-$term non$-$cancellable purchase commitment with its primary supplier.

Sandhill agreed to purchase $$1\mathrm{.}92$ million of raw materials during the next fiscal year under this contract. At the end of the current

fiscal year, the raw material to be purchased under this contract had a market value of $$1\mathrm{.}56$ million. What is the journal entry at the

end of the current fiscal year?

Debit Loss on Purchase Commitments for $$360000$ and credit Estimated Liability on Purchase Commitment for $$360000$

No journal entry is required

Debit Loss on Purchase Commitments for $$1560000$ and credit Estimated Liability on Purchase Commitments for

$$1560000$

Debit Estimated Liability on Purchase Commitments for $$360000$ and credit Loss on Purchase Commitments for $$360000$