On November 1, 2020, ABC Products forecasts that it will purchase 1,000,000 bushels of oats in 4 months for use in the manufacture of its cereal products. To hedge against rising costs, ABC Products buys 1,000,000 March 2021 call options for oats, with a strike price of $2.75/bushel. The options cost $0.10/bushel, and the spot price on November 1 is $2.72/bushel. Management designates the intrinsic value of the options as the hedge, and the options qualify as a cash flow hedge of the forecasted purchase. On December 31, 2020, ABC Products' year-end, the spot price for oats is $2.77/bushel and the options are selling for $0.13/bushel. On March 1, 2021, the spot price for oats is $2.80/bushel and ABC Products sells the options for their intrinsic value of $0.05/bushel. On March 3, 2021, ABC Products purchases 1,000,000 bushels of oats at the spot price of $2.81/bushel. It sells products containing the oats on June 5, 2021 at $2.90/bushel. Required Prepare entries to record the above events, including the December 31, 2020 adjusting entry.