Yokochan Bakeries Specializes in Making Cakes, Cookies, and Other Pastries

Essay

Yokochan Bakeries specializes in making cakes, cookies, and other pastries out of rice flour which they grind themselves. Yokochan anticipates purchasing 40,000 pounds of rice in January 2012. On November 1, 2011, Yokochan entered into a futures contract with Sagara Growers to purchase 40,000 pounds of rice on January 1, 2012, at $0.50 per pound. On December 31, 2011, and January 1, 2012, the prevailing market price for rice is $0.55 per pound. Yokochan purchases the rice and settles the futures contract on January 1, 2012.
Make the necessary entries on Yokochan's books at