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how would I fill out this problem? The treasurer of Headland Co. has read on the Internet that the stock price of Wade Inc. is
how would I fill out this problem?
The treasurer of Headland Co. has read on the Internet that the stock price of Wade Inc. is about to take off. In order to profit from this potential development, Headland Co. purchased a call option on Wade common shares on July 7, 2020, for $244. The call option is for 208 shares (notional value), and the strike price is $69. (The market price of a share of Wade stock on that date is $69) The option expires on January 31, 2021. The following data are available with respect to the call option Date September 30, 2020 December 31, 2020 January 4, 2021 Market Price of Wade Shares Time Value of Call Option $77 per share $181 75 per share 65 76 per share 29 Prepare the journal entries for Headland Co. for the following dates. (a) (b) July 7, 2020-Investment in call option on Wade shares. September 30, 2020-Headland prepares financial statements. December 31, 2020-Headland prepares financial statements. January 4, 2021-Headland settles the call option on the Wade shares (c) (d) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts.) Date Account Titles and Explanation Debit Credit > (To record the change in intrinsic value.) I (To record the time value change.) (To record the change in intrinsic value.) (To record the change in intrinsic value.) (To record the time value change.) (To record the change in intrinsic value.) I (To record the time value change.) (To record settlement of call option.) Step by Step Solution
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