On August 9, Jacobs Company Buys 25 Contracts on Nymex

question 23

Essay

On August 9, Jacobs Company buys 25 contracts on Nymex to receive December delivery of Brent Crude Oil. Each contract is in units of 1,000 bbls at a futures price of $24.85 per bbl. The initial margin on the contract is set at $25,000, with a maintenance margin of $19,000. The futures prices are as follows:
Required:
a.Journalize the entries for Jacobs Company for the first three days of the contract.
b.Why are forward prices discounted and future prices are not discounted?

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A sense of self that is characterized by positive self-regard and a cohesive sense of personal worth.

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A state of uncertainty or conflict about one's sense of self, often experienced during periods of significant change or development.

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The quality of being open and genuine, without pretense or deceit.