P16.3 Brondon Corp. purchased a put option on Mykia common shares on July 7, 2023, for $480. The put option is for 350 shares, and the strike price is $50. The option expires on January 31, 2024.The following data are available with respect to the put option:DateSept. 30, 2023Dec. 31, 2023Jan. 31, 2024InstructionsPrepare the journal entries for Brondon for the following dates:July 7, 2023: Invests in put option on Mykia shares.1September 30, 2023: Brondon prepares financial statements.1. December 31, 2023: Brondon prepares financial statements.January 31, 2024: Put option expires.Fair Value of Option$250100OMarket Price of Mykia Shares$56 per share$58 per share$62 per share

Common Shares As evidence of the funds invested in a corporation, common shares are granted to…

Answered: 16.3 Brondon Corp. purchased a put…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On December 1, 2021, the general ledger balance of Dolphin Inc.'s stock investment portfolio, which is classified as fair value through net income (FV-NI) is $284,900. On December 31, the controller determines that the fair value of this portfolio should be $312,600. The adjusting entry for the portfolio will include: Question 10 options: DR FV-NI investments $27,700 CR Cash FV-NI investments $27,700 CR FV-NI investments $27,700 DR Gain on investments $27,700
Suncor Energy Inc. (SU) shares are listed on the New York Stock Exchange. At 9:30 a.m. on January 14, 2016, these shares sold for $21.85 per share. The volatility on the returns of Suncor shares is approximately 24%. The following call and put option contracts were available for the months of January, February, and March: CALLS Strike/Expiry January 22, 2016 February 19, 2016 March 18, 2016 23 0.34 0.72 0.96 24 0.13 0.41 0.69 25 0.25 0.26 0.40 PUTS Strike/Expiry January 22, 2016 February 19, 2016 March 18, 2016 23 1.28 2.01 2.14 24 2.63 2.80 2.92 25 3.60 3.70 3.95 Each option contract involves 100 shares. The risk-free rates for these three expiration dates are 0.6%, 1%, and 1.2%. All three rates are continuously compounded. Given the information on Suncor shares and options above, construct a protective put using the 23-put with February expiration. Hold the protective put…
On May 1, 2020, Sunco Limited purchased a call option from Moonco Corporation. The option gave Sunco the right to purchase shares in a third company, Galaxy Company. Sunco settled the options in cash on June 16, 2020. Following are additional details pertaining to the option: Number of shares that can be purchased with the call option 7,400 Call option exercise price per share $ 10.03 Market price per share of Galaxy Company on May 1, 2020 $ 10.03 Price paid by Sunco to purchase the option $ 1,800 Market price per share of Galaxy Company on May 31, 2020 $ 11.24 Fair value of call option on May 31, 2020 $ 9,200 Market price per share of Galaxy Company on June 16, 2020 $ 11.29 Fair value of call option on June 16, 2020 $ 8,800 Sunco has a year end of May 31. Required: Prepare the journal entries required on the books of Sunco Limited on each of the…
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