On April 1, 2023, Gamma Corp. purchases a call option for $500, which gives Gamma the right to buy 1,000 shares of Delta Inc. for $30 each until December 1, 2023. Delta Inc. shares are currently trading for $30. At June 30, 2023, the options are trading at $4,800 and the shares at $32 each. At December 1, 2023, the options expire with no value. The entry to record the purchase of the call option is: a. Derivatives-Financial Assets. Cash. 500 500 b. Cash. 500 Derivatives Financial Assets. 500 c. FV-NI Investments. Cash... 500 500 d. No entry required.
On April 1, 2023, Gamma Corp. purchases a call option for $500, which gives Gamma the right to buy 1,000 shares of Delta Inc. for $30 each until December 1, 2023. Delta Inc. shares are currently trading for $30. At June 30, 2023, the options are trading at $4,800 and the shares at $32 each. At December 1, 2023, the options expire with no value. The entry to record the purchase of the call option is: a. Derivatives-Financial Assets. Cash. 500 500 b. Cash. 500 Derivatives Financial Assets. 500 c. FV-NI Investments. Cash... 500 500 d. No entry required.
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
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 3C
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On April 1, 2023, Gamma Corp. purchases a call option for $500, which gives Gamma the right to buy 1,000 shares of Delta Inc. for $30 each until December 1, 2023. Delta Inc. shares are currently trading for $30. At June 30, 2023, the options are trading at $4,800 and the shares at $32 each. At December 1, 2023, the options expire with no value. The entry to record the purchase of the call option is:
a. Derivatives-Financial Assets. Cash. 500 500
b. Cash. 500 Derivatives Financial Assets. 500
c. FV-NI Investments. Cash... 500 500
d. No entry required.
Please dont provide solution image based thanx
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