In November 2013, The Brunswick Company signed the following purchase commitment. Brunswicks fiscal year-end is December 31, 2013. The company uses a perpetual inventory system. The contract was exercised and paid in cash on its expiration date.

A commitment to purchase 20,000 units of inventory at $15 per unit at March 15, 2014.

a.Prepare the necessary adjusting entry at December 31, 2013 (year-end), assuming a unit market price on that date is $12

b.Prepare the journal entry to record the purchase for cash on March 15, 2014, assuming a unit market price on that date is $20.