On 30 November 20x1, Systech Ltd entered into a non-cancellable contract to buy 1,000 shares of Fastrack Ltd for $5,000 on 31 July 20x2. On the same date, Systech Ltd purchased a put option on 1,000 Fastrack shares for $500 to hedge the risk of a fall in the fair value of the commitment. The exercise price was $5 per share. The put option’s expiration date was 31 July 20x2. Data on the price movements of Fastrack shares and the put option are as follows:

Systech designated the option contract as a hedge of the risk of changes in the fair value of the firm commitment resulting from changes in the price of Fastrack’s shares. Systech excluded the time value of the option contract from the hedging relationship. Systech Ltd closed the position on the put option on 31 July 20x2, fulfilled its obligations under the contract, and sold off its shares on the same date. Systech’s year-end is 30 June 20x2.

Required
Prepare the journal entries on 30 November 20x1, 30 June 20x2, and 31 July 20x2.

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30 November 20x1 30 June 20x2. 31 July 20x2 Date Price of Fastrack's share Put option $5.00 $ 500 $4.50 $ 700 $4.00 $1,000