On April 1, 2020, Pharoah Ltd. paid $155 for a call to buy 550 shares...
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On April 1, 2020, Pharoah Ltd. paid $155 for a call to buy 550 shares of NorthernTel at a strike price of $24 per share any time during the next six months. The market price of Northern Tel's shares was $24 per share on April 1, 2020. On June 30, 2020, the market price for NorthernTel's stock was $34 per share, and the fair value of the option was $8,150. (a) Prepare the journal entry to record the purchase of the call option on April 1, 2020. (Credit account titles are automatically Indented when the amount is entered. Do not Indent manually. If no entry is required, select "No Entry" for the account titles and entero for the amounts.) Account Titles and Explanation April 1, Date Debit Credit 2020
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