On August 15, 2015, Outkast Co. invested idle cash by purchasing a call option on Counting Crows Inc. ordinary shares for \($360\). The notional value of the call option is 400 shares, and the option price is \($40\). (Market price of a Counting Crows share is \($40\).) The option expires on January 31, 2016.

The following data are available with respect to the call option.

Instructions Prepare the journal entries for Outkast for the following dates.

(a) Investment in call option on Counting Crows shares on August 15, 2015.

(b) September 30, 2015—Outkast prepares financial statements.

(c) December 31, 2015—Outkast prepares financial statements.

(d) January 15, 2016—Outkast settles the call option on the Counting Crows shares.

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Date September 30, 2015 December 31, 2015 January 15, 2016 Market Price of Counting Crows Shares $48 per share 46 per share 47 per share Time Value of Call Option $180 888 65 30