Corine Ltd,a Trader Bought a December Put Option for 10 $\quad \$ 4500$

question 2

Multiple Choice

Corine Ltd,a trader bought a December put option for 10 $100 000 10% treasury bonds at a premium of $3.95 on January 1,2010.Year end for Corine is 30 June when the price for a December put option for $100 000 10% treasury bonds is $3.50.
What would be the journal entry for 30 June 2010?

• A) Dr Loss on options contract \(\quad \$ 4500\)
• \(\mathrm { Cr }\) Investment in options contract\(\quad\$ 4500\)
• B) \(\begin{array} { l l l }
• \text { Dr Loss on options contract } & \$ 450 & \\
• \text { Cr Investment in options contract } & & \$ 450
• \end{array}\)
• C) Dr Investment in options contract \(\quad \$ 4500\)
• \(\mathrm { Cr }\) Gain on options contract\(\quad\$ 4500\)
• D) Dr Investment in options contract \(\quad \$ 450\)
• \(\mathrm { Cr }\) Gain on options contract\(\quad\$ 450\)

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