Question
ABC purchased a put option on 100 shares of XYZ stock. The exercise price is $96. If the current stock price is $85 and the
ABC purchased a put option on 100 shares of XYZ stock. The exercise price is $96. If the current stock price is $85 and the time value of the option is $70, the balance of the Put Option account is __________.
ABC issued $400,000 of 8% semiannual bonds for $428,425 when the market rate was 7%. ABC uses the effective interest method. At the first interest payment date, interest expense is __________.
ABC issued $550,000 bonds at par and designates an interest rate swap as a fair value hedge of the bonds. During the year the fair value of the bonds falls to $507,201. On the balance sheet, ABC shows the bonds at __________.
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