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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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