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On January 2, 2020, Cullumber Corporation purchased a call option for $350 on Walter's common shares. The call option gives Cullumber the option to buy 930 shares of Walter at a strike price of $25 per share any time during the next six months. The market price of a Walter share was $25 on January 2, 2020 (the intrinsic value was therefore $0). On March 31, 2020, the market price for Walter stock was $36 per share, and the fair value of the option was $17,400. Your answer is partially correct. Try again. Prepare the journal entry to record the purchase of the call option on January 2, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Debit Credit Date Account Titles and Explanation X January 2, 2020 Contributed Surplus - Stoc 350 Cash 350 Prepare the journal entry to recognize the change in the call option's fair value as at March 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit March 31, 2020 T Contributed Surplus - Stoc 17050 X Unrealized Gain or Loss 17050 What was the effect on net income of entering into the derivative transaction for the period from January 2 to March 31, 2020? The gain increases net income for the period January 2 to March 31, 2020 by 27280 Accounts Payable Accounts Receivable Accumulated Other Comprehensive Income Bonds Payable Cash Common Shares Compensation Expense Contributed Surplus - Conversion Rights Contributed Surplus - Conversion Rights Expired Contributed Surplus - Expired Stock Options Contributed Surplus - Stock Options Contributed Surplus - Stock Warrants Cost of Goods Sold Deficit Derivatives-Deposits Derivatives - Financial Assets/Liabilities Equipment Contributed Surplus - Stock Options Fair Value - NI Investments Fair Value - OCI Investments Finished Goods Inventory Gain or Loss on Derivatives Interest Expense Interest Income Interest Payable Interest Receivable Inventory Liability under Share - Appreciation Rights Plans Loss on Redemption of Bonds Loss on Retirement of Bonds No Entry Notes Payable Notes Receivable Preferred Shares Raw Materials Retained Earnings Raw Materials Inventory Sales Revenue Supplies Unrealized Gain or Loss Unrealized Gain or Loss - OCI Unrealized Holding Gain - Futures Contract

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