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Prepare the journal entry for Crane for July 7, 2020: Invests in call option on Ewing shares. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Prepare the journal entry for Crane for July 7, 2020: Invests in call option on Ewing shares. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

FINANCIAL ACCOUNTING
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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Prepare the journal entry for Crane for July 7, 2020: Invests in call option on Ewing shares. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date July 7, 2020 Account Titles and Explanation Debit Credit
Transcribed Image Text:Prepare the journal entry for Crane for July 7, 2020: Invests in call option on Ewing shares. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date July 7, 2020 Account Titles and Explanation Debit Credit
The treasurer of Crane 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, Crane purchased a call option on Ewing common shares on July 7, 2020, for $470. The call option is for 240 shares (notional value), and the strike price is $70. The option expires on January 31, 2021. The following data are available with respect to the call option: Date Sept. 30, Dec. 31, Jan. 4, 2020 2020 2021 Fair Value of Option $1,830 $945 $1,550 Market Price of Ewing Shares $76 per share $73 per share $75 per share
Transcribed Image Text:The treasurer of Crane 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, Crane purchased a call option on Ewing common shares on July 7, 2020, for $470. The call option is for 240 shares (notional value), and the strike price is $70. The option expires on January 31, 2021. The following data are available with respect to the call option: Date Sept. 30, Dec. 31, Jan. 4, 2020 2020 2021 Fair Value of Option $1,830 $945 $1,550 Market Price of Ewing Shares $76 per share $73 per share $75 per share
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