On November $3,20$X$2,$ PRD Corporation acquired $2$ JRS Company bonds $($$$1,000$ face value$)$ at a cost of $105.$ PRD classifies them as available$-$for$-$sale securities$.$ On this same date, PRD decides to hedge against a possible decline in the value of the securities by purchasing, at a cost of $$100,$ an at$-$the$-$money put option to sell the $2$ bonds at $105.$ The option expires on March $3,20$X$3.$ The fair values of the investment and the options follow:

November $3,20$X$2$ December $31,20$X$2$ March $3,20$X$3$

JRS Company bonds

Per bond $ $1,050$ $ $1,030$ $ $1,025$

Put option $(2$ bonds$)$

Market value $ $100$ $ $100$ $ $50$

Intrinsic value $04050$

Time value $ $100$ $ $60$ $ $0$

Required:

Prepare the entries required on November $3,20$X$2,$ to record the purchase of the JRS bonds and the put options.

Prepare the entries required on December $31,20$X$2,$ to record the change in intrinsic value and time value of the options, as well as the revaluation of the available$-$for$-$sale securities$.$

Prepare the entries required on March $3,20$X$3,$ to record the exercise of the put option and the sale of the securities at that date.