During 2014, Larue Co., a manufacturer of chocolate candies, contracted to purchase 200,000 pounds of cocoa beans at $4.00 per pound, delivery to be made in the spring of 2015. Because a record harvest is predicted for 2015, the price per pound for cocoa beans had fallen to $3.30 by December 31, 2014.Of the following journal entries, the one which would properly reflect in 2014 the effect of the commitment of Larue Co. to purchase the 200,000 pounds of cocoa is

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The Answer of During 2014, Larue Co., a manufacturer of chocolate candies, contracted to purchase 200,000 pounds of cocoa beans at $4.00 per pound, delivery to be made in the spring of 2015. Because a record harvest is predicted for 2015, the price per pound for cocoa beans had fallen to $3.30 by December 31, 2014.Of the following journal entries, the one which would properly reflect in 2014 the effect of the commitment of Larue Co. to purchase the 200,000 pounds of cocoa is