Merry Ltd., paid $250 for the option to buy 1,000 of its common shares for $15 each.
Question:
Instructions
(a) Provide the journal entry required to account for the purchase of the call option.
(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)?
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a The derivative is considered a fixedforfixed derivative in an entitys own shares a...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 978-1118300855
10th Canadian Edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
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