(Put Option) Warren Co. purchased a put option on Echo common shares on January 7, 2007, for $360. The put option is for 400 shares, and the strike price is $85. The option expires on July 31, 2007.

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

Instructions Prepare the journal entries for Warren Co. for the following dates.

(a) January 7, 2007—Investment in put option on Echo shares.

(b) March 31, 2007—Warren prepares financial statements.

(c) June 30, 2007—Warren prepares financial statements.

(d) July 6, 2007—Warren settles the put option on the Echo shares.

Date March 31, 2007 June 30, 2007 July 6, 2007 Market Price of Echo Shares $80 per share 82 per share 77 per share Time Value of Put Option $200 90 25