Question
On August 15, 2019, Sheridan Co. invested idle cash by purchasing a call option on Counting Crows Inc. common shares for $576. The notional
On August 15, 2019, Sheridan Co. invested idle cash by purchasing a call option on Counting Crows Inc. common shares for $576. The notional value of the call option is 640 shares, and the option price is $64. The option expires on January 31, 2020. The following data are available with respect to the call option. Market Price of Counting Date September 30, 2019 Crows Shares Time Value of Call Option $77 per share $288 December 31, 2019 $74 per share 104 January 15, 2020 $75 per share 48 Prepare the journal entries for Sheridan for the following dates. (a) Investment in call option on Counting Crows shares on August 15, 2019. (b) September 30, 2019-Sheridan prepares financial statements. (c) December 31, 2019-Sheridan prepares financial statements. (d) January 15, 2020-Sheridan settles the call option on the Counting Crows shares. (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.) No. Date (a) (b) Account Titles and Explanation Debit Credil
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