The Marjorie Company Entered into a Non-Cancellable Fixed Price Purchase $\quad 36,250$

The Marjorie Company entered into a non-cancellable fixed price purchase obligation on August 19, 2010.The agreement was to purchase 2, 500 units of material at $16.00 per unit to be delivered on April 1, 2011.On December 31, 2010, and on April 1, 2011, the replacement cost is determined to be $14.50 per unit.Which journal entry would be correct to record the delivery on April 1, 2011?

A)
Inventory (or Purchases) $\quad 36,250$
Accrued Loss on Purchase Commitments $\quad$ 3,750
Accounts Payable $\quad$$\quad$ 40,000
B)
$\begin{array}{cr}\text { Inventory (or Purchases) } & 40,000 \\\text { Accounts Payable } & 40,000\end{array}$
C)
$\begin{array}{l}\text { Accrued Loss on Purchase Commitments } &3,750\\\text { Inventory }&3,750\end{array}$
D) No required entry