On August 1, 2020, Vaughn Ltd. purchased a call option from DDR Investments Corporation. The option gave Vaughn the right to buy 18,000 shares in a third company, MGL Ltd., at a price of $22.25 per share. On the day Vaughn purchased the option, MGL shares were trading at $22.25 each. Vaughn paid $700 for the options. On August 31, 2020, the MGL shares were trading at $24.75 each, and the options for MGL shares were trading at $45,500. On September 15, Vaughn settled the options in cash when the MGL shares were trading at $25.75, and the options were trading at $63,000.

h On August 1, 2020, d. purchased a call option from DDR Investments C on the day he purchased the shares were trading 45.500. September 15, wh e them e e then we right to buy 18,000 shares in a third company, MGL, Ltd. at of $22.25 per share 31, 2020, the channes were trading at $24.75 cached the options for MGL $25 Prepare the journal entries to record the above transactions "No Entry for the files and enter for the outils C Date Accountries and Expation o nsiderines. Para Gaucho C 1300 an or loss on Deria Tercers the change in value of Debit Credit - Date Aug. 1 Account Titles and Explanation Derivatives - Financial Assi - 700 L U 700 TCash (To record the acquisition of the option.) TAug. 31 Derivatives - Financial AssT 44800 T 44800 Gain or Loss on Derival (To record the change in value of the option.) TSept. 15 Derivatives - Financial Ass T 17500T Gain or Loss on Deriva (To record the change in value of the option.) Cash LL LL TL 63000 63000 T Derivatives - Financial (To record the settlement of the option Your answer is partially correct. Try again Prepare the September 15 journal entry assuming W h e ed instead the shares in MGL C If no try is required, select "No try for the accounts and enter for the a account nts) t Date Accounts and patien Sept. 15 ans and Date Account Titles and Explanation Debit Credit Aug Derivatives - Financial Ass Cash 700 (To record the acquisition of the option.) Aug. 31 Derivatives - Financial AssT Deriv - 44800 44800 T Gain or Loss on Derivat (To record the change in value of the option) sept. Derivatives - Financial Ass 17500 17500 Gain or Loss on Derivat (To record the change in value of the option.) TCash 63000 T Derivatives - Financial (To record the settlement of the option.) Your answer is partially correct. Try again. Prepare the September 15 journal entry assuming Vaughn accepted instead the shares in MGL. automatically indented when the amount is entered. Do not indent manually. If no ent Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit Sept. 15 Derivatives - Financial Ass 17500 17500 Gain or Loss on Derivat (To record the change in value of the option) (To take delivery of the shares using the option)