Vaughn Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2021 at a

Vaughn Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2021 at a cost of $1,001,000. At December 31, 2020, the raw materials to be purchased have a market value of $955,300. In 2021, Vaughn paid $1,001,000 to obtain the raw materials which were worth $955,300. Vaughn uses a periodic inventory system. Prepare the entry to record the purchase.

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