The treasurer of Hing Wa Corp. has read on the Internet that the stock price of Ewing Inc. is about to take off. In order to profit from this potential development, Hing Wa purchased a call option on Ewing common shares on July 7, 2020, for $480. The call option is for 240 shares (notional value), and the strike price is $80. The option expires on January 31, 2021. The following data are available with respect to the call option:

Date		Fair Value of Option		Market Price of Ewing Shares
Sept. 30, 2020		$1,780		$86 per share
Dec. 31, 2020		965		$83 per share
Jan. 4, 2021		1,550		$85 per share

Instructions

Prepare the journal entries for Hing Wa for the following dates:

a. July 7, 2020: Invests in call option on Ewing shares.

b. September 30, 2020: Hing Wa prepares financial statements.

c. December 31, 2020: Hing Wa prepares financial statements.

d. January 4, 2021: Hing Wa settles the call option net on the Ewing shares (that is, without buying the shares).