Question
On August 15, 2013, Outkast Co. invested idle cash by purchasing a call option on Counting Crows Inc. common shares for $378. The notional value
On August 15, 2013, Outkast Co. invested idle cash by purchasing a call option on Counting Crows Inc. common shares for $378. The notional value of the call option is 800 shares, and the option price is $42. The option expires on January 31, 2014. The following data are available with respect to the call option.
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Prepare the journal entries for Outkast for the following dates.
| (a) | Investment in call option on Counting Crows shares on August 15, 2013. |
(b)September 30, 2013Outkast prepares financial statements.
(c)December 31, 2013Outkast prepares financial statements
(d)January 15, 2014Outkast settles the call option on the Counting Crows shares.
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The Financial Services Marketing Handbook
Authors: Evelyn Ehrlich
2nd Edition
1118065719, 978-1118065716
