Question: On December 19, 2018, Enchanted Inc. sold 1,000 put options on the common shares of CIBC. Each option gives the option holder the right to

On December 19, 2018, Enchanted Inc. sold 1,000 put options on the common shares of CIBC. Each option gives the option holder the right to sell one share of CIBC at $100 each until March 19, 2019. Enchanted received $1,000 for issuing these options. At the company’s year-end of December 31, 2018, the options contracts traded on the TMX at $1.50 per contract. On March 19, 2019, CIBC shares closed at $98 per share, and the options were exercised.

Required:

Record the journal entries related to these put options.

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