On January 1, 2022, Mills Corp. purchased a call option on shares of XYZ stock. Terms of the contract were as follows:

• Number of shares: 100
• Strike price: $140 per share
• Expiration date: April 30, 2022
• Total cost of the option contract: $100
• Seller of the option contract: First Investment Bank

On January 1, 2022, XYZ stock was trading at $140 per share. The following additional information is known:

• On March 31, 2022, the price of XYZ stock was $160 per share. A market appraisal indicated that the time value of the option contract was $80.
• On April 5, 2022, the price of XYZ stock was $155 per share. A market appraisal indicated that the time value of the option contract was $70. On this date, Mills settled the option contract.

Required: 1. Prepare the appropriate journal entry or entries related to transactions occurring inJanuary 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 Mills Corp. would have included in itsMarch 2022 quarterly financial statements related to the option contract. 3. Prepare the appropriate journal entry or entries related to settlement of the option in April 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Req 1.

Journals

Jan. 1, 2022: Record purchase of the call option contract.

March 31, 2022: Provide any journal entry needed to update the intrinsic value of the option contract.

March 31, 2022: Provide any journal entry needed to update the time value of the option contract.

Req 2

Indicate any amounts that Mills Corp. would have included in its March 2022 quarterly financial statements related to the option contract.

Req 3

Journals

April 5, 2022: Provide any journal entry needed to update the intrinsic value of the option contract.

April 5, 2022: Provide any journal entry needed to update the time value of the option contract.

April 5, 2022: Provide the journal entry for settlement of the option contract (assume cash settlement).