Kemper Company signed a long-term noncancelable purchase commitment with a major
ID: 2466296 • Letter: K
Question
Kemper Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2015 at a cost of $1,016,400. At December 31, 2014, the raw materials to be purchased have a market value of $974,100. In 2015, Kemper paid $1,016,400 to obtain the raw materials which were worth $974,100. Prepare the entry to record the purchase. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation
Debit
Credit
I have all of them except for the first title, it is not inventory or inventory over/short. DO NOT ANSWER IS NOT SURE. THANK YOU.
??????? 974100
estimated liability on purc 42300
cash 1016400
Account Titles and Explanation
Debit
Credit
Explanation / Answer
Account Titles and Explanation
Debit
Credit
Purchases
$974,100
Estimated liability on purchase commitment
$42,300
Cash
$1,016,400
Account Titles and Explanation
Debit
Credit
Purchases
$974,100
Estimated liability on purchase commitment
$42,300
Cash
$1,016,400
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