Effects of an untimely demise of this officer

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Case: Florence Corporation was a party to the following transactions during November and December 20A1. Which of these transactions most likely resulted in an investment in a derivative subject to the accounting prescribed by FASB ASC 815-10-05, Accounting for Derivative Instruments and Hedging Activities?

Group of answer choices

Purchased a term life insurance policy on the company's chief executive officer to protect the company from the effects of an untimely demise of this officer.

Agreed to cosign the note of its 100%-owned subsidiary to protect the lender from the possibility that the subsidiary might default on the loan.

Purchased 1,000 shares of common stock of a public company based on the assumption that the stock would increase in value

Based on its forecasted need to purchase 300,000 bushels of wheat in 3 months, entered into a 3-month forward contract to purchase 300,000 bushels of wheat to protect itself from changes in wheat prices during the period.

Reference no: EM133326596

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