On April 1, 2020, Gamma Corp. purchases a call option for $ 500, which gives...
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On April 1, 2020, Gamma Corp. purchases a call option for $ 500, which gives Gamma the right to buy 1,000 shares of Delta Inc. for $ 30 each until December 1, 2020. Delta Inc. shares are currently trading for $ 30. At June 30, 2020, the options are trading at $ 4,000 and Gamma prepare financial statements on This June 30, 2020. At December 1, 2020, the options expire with no value.
What entry (if any) Gamma will prepare to record this option on June 30, 2020
a) DerivativesFinancial Assets/Liabilities............................................... 4,000
Gain or Loss on Derivatives.......................................................... 4,000
b.) DerivativesFinancial Assets/Liabilities............................................... 3,500
Gain or Loss on Derivatives.......................................................... 3,500
c.) Other Comprehensive Loss..................................................................... 3,500
