On July 5, 2020, Alpha Corp. purchased a call option for $ 2,400, giving it the right to buy 2,000 shares of Omega Corp. for $ 20 per share. On August 18, 2020, when the option value is $ 12,000, Omega settles the option for cash.

The entry on Alphas books to record the settlement is:

Cash or Loss on Derivatives.................................................................	12,000
DerivativesFinancial Assets/Liabilities.......		12,000

Cash.................................................................	12,000
Gain or Loss on Derivatives ...........................................................		12,000

Cash.................................................................	12,000
DerivativesFinancial Assets/Liabilities.......		2,400
Gain or Loss on Derivatives ...........................................................		9,600

DerivativesFinancial Assets/Liabilities.............	2,400
Cash...........................................................	9,600
Gain or Loss on Derivatives...........................................................		12,000