Hummel Company Purchased a Put Option on Olney Common Shares

question 83

Essay

Hummel Company purchased a put option on Olney common shares on July 7, 2014, for $100. The put option is for 200 shares, and the strike price is $30. The option expires on January 31, 2015. The following data are available with respect to the put option:
InstructionsPrepare the journal entries for Hummel Company for the following dates:
(a) July 7, 2014-Investment in put option on Olney shares.
(b) September 30, 2014- Hummel prepares financial statements.
(c) December 31, 2014- Hummel prepares financial statements.(d) January 31, 2015-Put option expires.

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Definitions:

Operationalize

The process of defining how a concept or variable will be measured and assessed in a specific research context.

Construct

An abstract concept or idea that is chosen for study, usually representing phenomena that are not directly observable.

Variance

A statistical measure that indicates the spread of a dataset or the distribution of data points.

Dependent Variables

Variables in experimental research that are affected by manipulations of the independent variable, observed to understand the effects of the intervention.