Question

Minns Co. purchased a put option on Justin common shares on July 7, 2017, for $400....

  1. Minns Co. purchased a put option on Justin common shares on July 7, 2017, for $400. The put option is for 400 shares, and the strike price is $70. (The market price of a share of Justin stock on that date is $70.) The option expires on January 31, 2018. The following data are available with respect to the put option.

Date Market Price of Minns Shares Time Value of Put Option

September 30, 2017 $77 per share $250

December 31, 2017 $75 per share $75

January 31, 2018 $78 per share $0

Instructions

Prepare the journal entries for Minns Co. for the following dates.

(a) July 7, 2017—Investment in put option on Justin shares.

(b) September 30, 2017—Minns prepares financial statements.

(c) December 31, 2017—Minns prepares financial statements.

(d) January 31, 2018—Put option expires.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Johnstone AG purchased a put option on Ewing ordinary shares on July 7, 2020, for €240....
Johnstone AG purchased a put option on Ewing ordinary shares on July 7, 2020, for €240. The put option is for 200 shares, and the strike price is €70. (The market price of an ordinary share of Ewing on that date is €70.) The option expires on January 31, 2021. The following data are available with respect to the put option. Date Market Price of Ewing Shares Time Value of Put Option September 30, 2020 €77 per share €125 December...
Blossom Corp. purchased a put option on Mykia common shares on July 7, 2020, for $467....
Blossom Corp. purchased a put option on Mykia common shares on July 7, 2020, for $467. The put option is for 350 shares, and the strike price is $45. The option expires on January 31, 2021. The following data are available with respect to the put option: Fair Value Market Price Date of Option of Mykia Shares Sept. 30, 2020 $228 $52 per share Dec. 31, 2020 $101 $54 per share Jan. 31, 2021 $0 $58 per share Prepare the...
The Assistant Treasurer of Ingenuity Ltd. has read on the Internet that the stock price of...
The Assistant Treasurer of Ingenuity Ltd. has read on the Internet that the stock price of Papillon Inc. is about to take off. In order to profit from this potential development, Ingenuity purchased a call option on Papillon common shares on July 7, 2017 for $480. The call option is for 240 shares (notional value), and the strike price is $80. The option expires on January 31, 2018. The following data are available with respect to the call option D...
JTC purchased put options on Flynn common shares on July 7, 2020, for $200 as a...
JTC purchased put options on Flynn common shares on July 7, 2020, for $200 as a speculative investment. The put options give JTC the right to sell 100 shares at a strike price of $20 each. The options expire on January 31, 2021. The following data is observed through 2020: Flynn Stock Price Option Time Value July 7, 2020 $20 $200 September 30, 2020 $18 $150 December 31, 2020 $22 $90 a. In the third quarter (July to September) of...
On December 31, 2017, Berclair Inc. had 560 million shares of common stock and 5 million...
On December 31, 2017, Berclair Inc. had 560 million shares of common stock and 5 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purchased 168 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2018. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2018, was $1,050 million. Also outstanding at December...
On December 31, 2017, Berclair Inc. had 360 million shares of common stock and 3 million...
On December 31, 2017, Berclair Inc. had 360 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purchased 88 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2018. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2018, was $550 million. Also outstanding at December...
On December 31, 2017, Berclair Inc. had 420 million shares of common stock and 6 million...
On December 31, 2017, Berclair Inc. had 420 million shares of common stock and 6 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purchased 112 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2018. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2018, was $700 million. Also outstanding at December...
On December 31, 2017, Jackson Company had 100,000 shares of common stock outstanding and 30,000 shares...
On December 31, 2017, Jackson Company had 100,000 shares of common stock outstanding and 30,000 shares of 7%, $50 par, cumulative preferred stock outstanding. On February 28, 2018, Jackson purchased 24,000 shares of common stock on the open market as treasury stock paying $45 per share. Jackson sold 6,000 of the treasury shares on September 30, 2018, for $47 per share. Net income for 2018 was $180,905. Also outstanding at December 31, 2017, were fully vested incentive stock options giving...
On December 31, 2017, Dow Steel Corporation had 720,000 shares of common stock and 42,000 shares...
On December 31, 2017, Dow Steel Corporation had 720,000 shares of common stock and 42,000 shares of 8%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 4% common stock dividend on May 15 and paid cash dividends of $520,000 and $81,000 to common and preferred shareholders, respectively, on December 15, 2018. On February 28, 2018, Dow sold 66,000 common shares. Also, as a part of a 2017 agreement for the acquisition of Merrill Cable Company, another 19,000 shares...
On December 31, 2017, Berclair Inc. had 300 million shares of common stock and 9 million...
On December 31, 2017, Berclair Inc. had 300 million shares of common stock and 9 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purchased 120 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2018. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2018, was $450 million. Also outstanding at December...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT