On April 1, 2020, Bangalore Corp. purchases a put option for $2,000, which gives it the right to sell 1,000 shares of Targa Inc. for $30 each until April 1, 2021. Targa Inc., shares traded for $35 each on April 1, 2020. At October 1, 2020 Targa shares are trading at $27 each and Bangalore settles the option directly with the writer (without supplying the Targa shares). The time value of the option only had been updated on September 30, 2020. At October 1, 2020 the journal entry on Bangalore Corp. books would be:

a. LOSS DR $1,000; Derivative Asset-options CR $1,000.

b. Cash DR $1,000; Derivative Asset-Options CR $1,000.

c. Cash DR $3,000; Derivative Asset-Options CR $1,000; Gain On Derivative Asset-Options CR $2,000.

d. Cash DR $3,000; Derivative Asset-Options CR $2,000; Gain On Derivative Asset-Options CR $12,000.

e. None of the above.