The treasurer of Miller AG has read on the Internet that the price of Wade Inc. ordinary shares is about to take off. In order to profit from this potential development, Miller purchased a call option on Wade shares on July 7, 2019, for ‚¬240. The call option is for 200 shares (notional value), and the strike price is ‚¬70. (The market price of a Wade share on that date is ‚¬70.) The option expires on January 31, 2020. The following data are available with respect to the call option.

Instructions
Prepare the journal entries for Miller for the following dates.
a. July 7, 2019-Investment in call option on Wade shares.
b. September 30, 2019-Miller prepares financial statements.
c. December 31, 2019-Miller prepares financial statements.
d. January 4, 2020-Miller settles the call option on the Wade shares.

Transcribed Image Text:

Market Price of Wade Shares Time Value of Call Option Date September 30, 2019 December 31, 2019 €77 per share 75 per share 76 per share €180 65 January 4, 2020 30