On October 15,2020 , Headland Co. purchased 3,930 barrels of fuel oil with a cost of $216,150 ( $55 per barrel). Headland is holding this inventory in anticipation of the winter 2021 heating season. Headland accounts for its inventory at the lower-of-FIFO-cost-or-net realizable value. To hedge against potential declines in the value of the inventory, Headland also purchased a put option on the fuel oil. Headland paid an option premium of $280 for the put option, which gives Headland the option to sell 3,930 barrels of fuel oil at a strike price of $55 per gallon. The option expires on March 1, 2021. The following data are available with respect to the values of the fuel of inventory and the put option. (1) October 15, 2020-Headland purchases fuel oil and the put option on fuel oil. (2) October 31, 2020-Headland prepares financial statements. (3) November 30, 2020-Headland prepares financial statements. (4) December 31, 2020-Headland prepares financial statements. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (2) Oct. 31,2020 Loss on Settlement of Put Option 7860 Allowance to Reduce Inventory to Market (To record the time value change.) Put Option 7860 Unrealized Holding Gain or Loss - Income (To adjust the value of inventory.) Unrealized Holding Gain or Loss - Income (To record the change in intrinsic value.) (3) Nov. 30,2020 Loss on Settlement of Put Option \begin{tabular}{|l||} \hline 3930 \\ \hline \end{tabular} Allowance to Reduce Inventory to Market (To record the time value change.) (To record the time value change.) Put Option 3930 Unrealized Holding Gain or Loss - Income (To adjust the value of inventory.) Unrealized Holding Gain or Loss - Income 58 Put Option (To record the change in intrinsic value.) Dec. 31,2020 Loss on Settlement of Put Option \begin{tabular}{|l||} \hline \hline \\ \hline \end{tabular} Allowance to Reduce Inventory to Market (To record the time value change.) Put Option 11790 Unrealized Holding Gain or Loss - Income Put Option 11790 Unrealized Holding Gain or Loss - Income (To adjust the value of inventory.) 71 (To record the change in intrinsic value.)