Journal Entry Descriptions to Be Used:

• No journal entry required
• Accounts payable
• Accounts receivable
• Accumulated depreciation
• Advertising expense
• Allowance for credit losses
• Allowance for uncollectible accounts
• Bad debt expense
• Bonds payable
• Building
• Call option
• Cash
• Cash surrender value of life insurance
• Common stock
• Cost of goods sold
• Deferred revenue
• Depreciation expense
• Discount on bonds payable
• Dividend revenue
• Dividends
• Equipment
• Fair value adjustment
• Furniture and fixtures
• Futures contract
• Gain on investment (unrealized, NI)
• Gain on investment (unrealized, OCI)
• Gain on settlement of call option
• Gain on settlement of put option
• Income summary
• Income tax expense
• Income tax payable
• Insurance expense
• Interest expense
• Interest payable
• Interest rate swap
• Interest receivable
• Interest revenue
• Inventory
• Investment in bonds
• Investment in equity securities
• Investment revenue
• Land
• Loss on investment (unrealized, NI)
• Loss on investment (unrealized, OCI)
• Loss on settlement of call option
• Loss on settlement of put option
• Maintenance expense
• Miscellaneous expense
• Notes payable
• Notes receivable
• Premium on bonds payable
• Prepaid advertising
• Prepaid insurance
• Prepaid rent
• Put option
• Reclassification adjustmentOCI
• Rent expense
• Retained earnings
• Salaries and wages expense
• Salaries and wages payable
• Sales revenue
• Service revenue
• Supplies
• Supplies expense
• Utilities expense
• Utilities payable

On January 1, 2022, Rosewood Corp. purchased a put option on shares of ICM stock. Terms of the contract were as follows: Number of shares: 100 Strike price: $220 per share Expiration date: May 31, 2022 Total cost of the option contract: $90 Seller of the option contract: First Investment Bank On January 1, 2022, ICM stock was trading at $220 per share. The following additional information is known: On March 31, 2022, the price of ICM stock was $190 per share. A market appraisal indicated that the time value of the option contract was $70. On May 10, 2022, the price of ICM stock was $195 per share. A market appraisal indicated that the time value of the option contract was $60. On this date, Rosewood settled the option contract. Required: 1. Prepare the appropriate journal entry or entries related to transactions occurring in January 2022 through March 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2. Indicate any amounts that Rosewood Corp. would have included in its March 2022 quarterly financial statements related to the option contract 3. Prepare the appropriate journal entry or entries related to settlement of the option in May 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Req 1 Req 2 Reg 3 Prepare the appropriate journal entry or entries related to transactions occurring in January 2022 through March 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Event General Journal Credit No 1 Debit 90 1 Futures contract Cash 90 2 54 N Futures contract Accounts receivable 54 3 3 3,000 Call option Gain on settlement of call option 3,000 Req 1 Req 2 Reg 3 Indicate any amounts that Rosewood Corp. would have included in its March 2022 quarterly financial statements related to the option contract. Balance Sheet (current assets): Call option $ 3,000 Income Statement (partial): Net gain (unrealized, NI): $ $ 36 Req 1 Reg 2 Req3 Prepare the appropriate journal entry or entries related to settlement of the option in May 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No General Journal Debit Credit Event 1 36 Futures contract Accounts receivable 36 2 2 36 Futures contract Accounts receivable 36 3 3 Cash Loss on settlement of call option Call option 2,500 500 3,000