Welch Company purchased a put option on Reese common shares on July 7, 2015, for $215. The put option is for 300 shares, and the strike price is $51. The option expires on July 31, 2015. The following data are available with respect to the put option:
InstructionsPrepare the journal entries for Welch Company for the following dates:
(a) January 7, 2015-Investment in put option on Reese shares.
(b) March 31, 2015- Welch prepares financial statements.
(c) June 30, 2015- Welch prepares financial statements.(d) July 6, 2015- Welch settles the put option on the Reese shares.

Question

Welch Company purchased a put option on Reese common shares on July 7, 2015, for $215. The put option is for 300 shares, and the strike price is $51. The option expires on July 31, 2015. The following data are available with respect to the put option:  
InstructionsPrepare the journal entries for Welch Company for the following dates:
(a) January 7, 2015-Investment in put option on Reese shares.
(b) March 31, 2015- Welch prepares financial statements.
(c) June 30, 2015- Welch prepares financial statements.(d) July 6, 2015- Welch settles the put option on the Reese shares.

Quizplus · Accepted Answer

The Answer of Welch Company purchased a put option on Reese common shares on July 7, 2015, for $215. The put option is for 300 shares, and the strike price is $51. The option expires on July 31, 2015. The following data are available with respect to the put option:  
InstructionsPrepare the journal entries for Welch Company for the following dates:
(a) January 7, 2015-Investment in put option on Reese shares.
(b) March 31, 2015- Welch prepares financial statements.
(c) June 30, 2015- Welch prepares financial statements.(d) July 6, 2015- Welch settles the put option on the Reese shares.

Welch Company Purchased a Put Option on Reese Common Shares