Essay
On September 23, Gensil Company buys 40 contracts on the Chicago Board of Trade to deliver orange juice to a certified warehouse in November. Each contract is in units of 15,000 pounds at a futures price of $0.851 per pound. The initial margin on the contract is set at $18,000, with a maintenance margin of $14,000. The futures prices are as follows: 
Required:
a.Journalize the entries for Gensil Company for the first three days of the contract.
b.What is meant by the maintenance margin and how could it affect Gensil Company?
Correct Answer:
Verified
Correct Answer:
Verified
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