On December 1, 2020, a Calendar-Year Company Owns 10,000 Lbs

On December 1, 2020, a calendar-year company owns 10,000 lbs. of a commodity carried at a cost of $200,000, that it expects to sell on January 31, 2021 in the normal course of business. The company hedges its price risk on this commodity by selling commodity futures for delivery on January 31, 2021. The position requires a $2,000 margin deposit. The company closes its futures position on January 31, 2021 and sells the commodity to a customer for cash at the spot rate. Spot and futures prices/lb. for the commodity are:
$$\begin{array} { | l | c | c | } \hline & \text { Spot Price } & \begin{array} { c } \text { Futures Price for } \\\text { January 31, 2021 Delivery }\end{array} \\\hline \text { December 1,2020 } & \$ 21.00 & \$ 21.05 \\\hline \text { December 31, 2020 } & 20.25 & 20.35 \\\hline \text { January 31, 2021 } & 19.90 & 19.90 \\\hline\end{array}$$ Required
Prepare the journal entries to record the above events, including adjusting entries at December 31. The futures qualify as a fair value hedge of the commodity inventory, and all income effects are reported in cost of goods sold.