Ice Shave Entity writes a put option on Dec 31, 20x1 to purchase 5000 shares in exchange for a $5,000 premium. Under the contract, Ice Shave may be required to purchase $100,000 of its own shares two years from now (PV of 82,645). The contract may be settled only under gross physical delivery method. Record all the necessary journal entries.
Ice Shave Entity writes a put option on Dec 31, 20x1 to purchase 5000 shares in exchange for a $5,000 premium. Under the contract, Ice Shave may be required to purchase $100,000 of its own shares two years from now (PV of 82,645). The contract may be settled only under gross physical delivery method. Record all the necessary journal entries.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 11RE
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Ice Shave Entity writes a put option on Dec 31, 20x1 to purchase 5000 shares in exchange for a $5,000 premium. Under the contract, Ice Shave may be required to purchase $100,000 of its own shares two years from now (PV of 82,645). The contract may be settled only under gross physical delivery method. Record all the necessary
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