Biotech Inc. purchased an option to buy 10,000 of its common shares for $35 each. The option
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Instructions
(a) Provide the journal entry required to account for the purchase of the call option assuming Biotech Inc. complies with IFRS.
(b) Assume that the contract allows both parties a choice to settle the option by either exchanging the shares or settling on a net basis. Would this change your conclusion in part (a)?
(c) Assume that Biotech Inc. complies with ASPE. Would this change your conclusion in part (a)?
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a The derivative is considered a fixedforfixed derivative in an entitys own shares as the option sti...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 978-0470161012
9th Canadian Edition, Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.
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