Multiple Choice Question 89 During the current fiscal year, Sandhill Corp. signed a long-term noncancellable purchase commitment with its primary supplier. Sandhill agreed to purchase $1.92 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 $1.56 million. What is the journal entry at the end of the current fiscal year?

A)Debit Unrealized Holding Gain or Loss for $1560000 and credit Estimated Liability on Purchase Commitments for $1560000.

B)No journal entry is required.

C) Debit Estimated liability on Purchase Commitments for $360000 and credit Unrealized Holding Gain or Loss for $360000.

D)Debit Unrealized Holding Gain or Loss for $360000 and credit Estimated Liability on Purchase Commitment for $360000.