*P17-18 (Fair Value Hedge) On November 3, 2006, Sprinkle Co. invested $200,000 in 4,000 shares of the common stock of Johnstone Co. Sprinkle classified this investment as available-for-sale. Sprinkle Co. is considering making a more significant investment in Johnstone Co. at some point in the future but has decided to wait and see how the stock does over the next several quarters. To hedge against potential declines in the value of Johnstone stock during this period, Sprinkle also purchased a put option on the Johnstone stock. Sprinkle paid an option premium of $600 for the put option, which gives Sprinkle the option to sell 4,000 Johnstone shares at a strike price of $50 per share. The option expires on July 31, 2007. The following data are available with respect to the values of the Johnstone stock and the put option.

Date	Market Price of Johnstone Shares	Time Value of Put Option
November 3, 2006	$50	$600
December 31, 2006	$55 per share	$375
March 31, 2007	$45	$175
June 30, 2007	$53	$40
July 31, 2007	$52

Prepare the journal entries for Sprinkle Co. for the following dates.

1. November 3, 2006Investment in Johnstone stock and the put option on Johnstone shares.

2. December 31, 2006Sprinkle Co. prepares financial statements.

3. March 31, 2007Sprinkle prepares financial statements.

4. June 30, 2007Sprinkle prepares financial statements.

5. July 1, 2007Sprinkle sells the Johnstone shares for $52 per share.

b. Prepare a Partial Income Statement related to the Johnstone Investment and the Put Option as of 12/31/2006 C. Prepare a Partial Balance Sheet related to the Johnstone Investment and the Put Option as of 12/31/2006