Essay
On August 9, Jacobs Company buys 25 contracts on Nymex to receive December delivery of Brent Crude Oil. Each contract is in units of 1,000 bbls at a futures price of $24.85 per bbl. The initial margin on the contract is set at $25,000, with a maintenance margin of $19,000. The futures prices are as follows: 
Required:
a.Journalize the entries for Jacobs Company for the first three days of the contract.
b.Why are forward prices discounted and future prices are not discounted?
Correct Answer:
Verified
Correct Answer:
Verified
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