On August 15, 2021, Madison Company Issued 10,000 Options on the Shares

question 2

Essay

On August 15, 2021, Madison Company issued 10,000 options on the shares of MVC (Middefield Valley Corporation). Each option gives the option holder the right to buy one share of MVC at $70 per share until March 16, 2022. Madison received $100,000 for issuing these options. At the company's year-end of December 31, 2021, the options contracts traded on the Montreal Exchange at $9.50 per contract. On March 16, 2022, MVC shares closed at $63 per share, so none of the options was exercised.
Required:
Record the journal entries related to these call options.

---

Definitions:

Accident Insurance

A form of insurance that provides compensation and support to individuals in case of physical injury or death resulting from accidental events.

British Poor Law

Legislation enacted in the UK during the 19th century aimed at providing relief for the impoverished and regulating the conditions of workhouses where the poor were housed.

Claude Monet

Claude Monet was a French painter, a founder of French Impressionist painting, renowned for his exploration of light and color, notably in his water lilies series.

Color Blind

The inability to perceive differences between some of the colors that others can distinguish, often resulting in difficulties distinguishing between reds and greens.