Question

On 1 September 2020, Blair Ltd purchases for speculative purposes a 90-day bank-accepted bill futures contract (2,500 Units) at 87.50. The contract has a face value of $1 million. On that date Blair makes an initial cash margin deposit of $30,000 with its broker. Blair holds the contract until 1 December 2020 when it closes out the contract. The quoted market price of the futures contract increases during September (to 88.00) and October (to 88.20) and declines in November (to 87.80).

Prepare the general journal entries for Blair for the months of September, October and November 2020.

Answer 1

Answer: