Saver Rio Ltd. purchased options to acquire 1,000 common shares of Spender Limited for $20 per share

Question:

Saver Rio Ltd. purchased options to acquire 1,000 common shares of Spender Limited for $20 per share within the next six months. The premium (cost) related to the options was $500. How should this be accounted for in the of Saver Rio? Explain which financial risks the transaction exposes the entity to.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...