Journal Entry Descriptions To Be Used:

• No journal entry required
• Accounts payable
• Accounts receivable
• Accumulated depreciation
• Advertising expense
• Allowance for credit losses
• Allowance for uncollectible accounts
• Bad debt expense
• Bonds payable
• Building
• Call option
• Cash
• Cash surrender value of life insurance
• Common stock
• Cost of goods sold
• Deferred revenue
• Depreciation expense
• Discount on bonds payable
• Dividend revenue
• Dividends
• Equipment
• Fair value adjustment
• Furniture and fixtures
• Futures contract
• Gain on investment (unrealized, NI)
• Gain on investment (unrealized, OCI)
• Gain on settlement of call option
• Gain on settlement of put option
• Income summary
• Income tax expense
• Income tax payable
• Insurance expense
• Interest expense
• Interest payable
• Interest rate swap
• Interest receivable
• Interest revenue
• Inventory
• Investment in bonds
• Investment in equity securities
• Investment revenue
• Land
• Loss on investment (unrealized, NI)
• Loss on investment (unrealized, OCI)
• Loss on settlement of call option
• Loss on settlement of put option
• Maintenance expense
• Miscellaneous expense
• Notes payable
• Notes receivable
• Premium on bonds payable
• Prepaid advertising
• Prepaid insurance
• Prepaid rent
• Put option
• Reclassification adjustmentOCI
• Rent expense
• Retained earnings
• Salaries and wages expense
• Salaries and wages payable
• Sales revenue
• Service revenue
• Supplies
• Supplies expense
• Utilities expense
• Utilities payable

On January 1, 2022, Mills Corp. purchased a call option on shares of XYZ stock. Terms of the contract were as follows: Number of shares: 100 Strike price: $160 per share Expiration date: April 30, 2022 Total cost of the option contract: $110 Seller of the option contract: First Investment Bank On January 1, 2022, XYZ stock was trading at $160 per share. The following additional information is known: On March 31, 2022, the price of XYZ stock was $180 per share. A market appraisal indicated that the time value of the option contract was $90. On April 5, 2022, the price of XYZ stock was $175 per share. A market appraisal indicated that the time value of the option contract was $80. On this date, Mills settled the option contract. Required: 1. Prepare the appropriate journal entry or entries related to transactions occurring in January 2022 through March 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2. Indicate any amounts that Mills Corp. would have included in its March 2022 quarterly financial statements related to the option contract. 3. Prepare the appropriate journal entry or entries related to settlement of the option in April 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Req 1 Req 2 Req3 Prepare the appropriate journal entry or entries related to transactions occurring in January 2022 through March 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) General Journal Debit Credit No 1 Event 1 110 Accounts receivable Cash 110 2 2 88 Futures contract Accounts receivable 88 3 3 x 2,000 Call option Gain on settlement of call option 2,000 X Reg 1 Req 2 Req 3 Indicate any amounts that Mills Corp. would have included in its March 2022 quarterly financial statements related to the option contract. Balance Sheet (current assets): Call option $ 2,000 Income Statement (partial): Net gain (unrealized, NI) 23 Reg 1 Req 2 Req3 Prepare the appropriate journal entry or entries related to settlement of the option in April 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) General Journal Debit Credit No 1 Event 1 2 2 23 % Futures contract Accounts receivable 23 3 3 1,500 Cash Loss on settlement of call option Call option 500 2,000