On October 1, 2021, Eagle Company forecasts the purchase of inventory from a British supplier on February 1, 2022, at a price of 100,000 British pounds. On October 1, 2021, Eagle pays $1,800 for a three-month call option on 100,000 pounds with a strike price of $2.00 per pound. The option is considered to be a cash flow hedge of a forecasted foreign currency transaction. On December 31, 2021, the option has a fair value of $1,600. The following spot exchange rates apply:

Date	Spot Rate
October 1, 2021	$	2.00
December 31, 2021	$	1.97
February 1, 2022	$	2.01

What journal entry should Eagle prepare on October 1, 2021?

Event	General Journal	Debit			Credit
A)	Cash		1,800
	Foreign Currency Option					1,800
B)	Forward Contract		1,800
	Cash					1,800
C)	Foreign Currency Option		1,800
	Foreign Exchange Gain or Loss					1,800
D)	Foreign Exchange Gain or Loss		1,800
	Cash					1,800
E)	Foreign Currency Option		1,800
	Cash					1,800

Option A.

Option B.

Option C.

Option D.

Option E