Working Paper 283
Bob Jensen at Trinity University


Exhibit 4
CapIT Corporation Journal Entries
(Students are required to fill in the numbers shown in red.)


  Date
______

June 17

 

 

June 30

 

 

July 31

 

 

Aug. 31

 

 

Sept. 17

 

 

Sept. 17

 

 


Dec. 17


   Accounts Debited or (Credited)
_________________________________________

Cash
Options contracts
Interest expense (revenue)
Other comprehensive income (OCI)
--To record purchase of 50 put option contracts

Cash
Options contracts
Interest expense (revenue)
Other comprehensive income (OCI)
--To record value adjustment of option contracts

Cash
Options contracts
Interest expense (revenue)
Other comprehensive income (OCI)
--To record value adjustment of option contracts

Cash
Options contracts
Interest expense (revenue)
Other comprehensive income (OCI)
--To record value adjustment of option contracts

Cash
Options contracts
Interest expense (revenue)
Other comprehensive income (OCI)
--To record option contract settlement

Cash
Options contracts
Notes payable
Interest expense (revenue)
Other comprehensive income (OCI)
--To record loan transaction for $25 million

Cash
Options contracts
Notes payable
Interest expense (revenue)
Other comprehensive income (OCI)
--To record payoff of $25 million loan

 

  Debit
(Credit)

__________

(53,125)
  53,125

 

 

(18,750)
  (6,250)
  25.000

 

  26,250
  (8.750)
(17,500)

 

  (5,000)
51,875
(46,875)


  62,500
(55,625)
(46,250)
 39,375


25,000,000

(25,000,000)

 


(25.434,375)

  25,000,000
      434,375


Balance
__________

(53,125)
  53,125

 


(53,125)
  34,375
  (6.250)
  25,000


(53,125)
  60,625
(15,000)
   7,500


(53,125)
  55,625
  36,875
(39,375)


    9,375

  (9,375)

 

25,009,375

(25,000,000)
         (9,375)

 

    (425,000)


     425,000