Question 2 Sheridan wrote (sold) a call option on Ewing Inc. common shares on July 7, 2020 for a premium of $460. The call option is for 240 shares (notional value), and the strike price is $65. The option expires on January 31, 2021. The following data are available with respect to the call option: Fair Value Date Sept. 30,2020 Dec. 31, 2020 Jan. 4, 2021 Market Price of Option $1,810 $980 $1,550 of Ewing Shares $71 per share $68 per share $70 per share Prepare the journal entry for Sheridan for July 7, 2020: Sale of the call option on Ewing shares. (Credit account titles are automatically indented when the 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.) Date July 7, 2020 Account Titles and Explanation Debit Credit Prepare the journal entry for Sheridan for September 30, 2020: Sheridan prepares financial statements. (Credit account titles are automatically indented when the 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.) Date September 30, 2020 Account Titles and Explanation Debit Credit Prepare the journal entry for Sheridan for December 31, 2020: Sheridan prepares financial statements. (Credit account titles are automatically indented when the 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.) Date Account Titles and Explanation December 31, 2020 Debit Credit Prepare the journal entry for Sheridan for January 4, 2021: Sheridan settles the call option net on the Ewing shares (that is, without selling the shares). (Credit account titles are automatically indented when the 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.) Date Account Titles and Explanation January 4, 2021 Debit Credit