Question: On 1 June 2016, Eastern Ltd made an initial cash margin deposit of $25,000 with its broker. On the same day it sold five (5)

On 1 June 2016, Eastern Ltd made an initial cash margin deposit of $25,000 with its broker. On the same day it sold five (5) October 2016 SPI 200 futures contracts, each unit is valued at $25.

The relevant prices for 2016 are as follows:

Date 1 June 30 June 31 July

Market price of SPI futures 1442 1450 1385

Market price of shares $175,000 $176,560 $169,000

Required

Assuming futures contracts are only for speculative purposes, prepare journal entries to record the above in the books of Eastern Ltd for the months of June and July.

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