Sorrentino Corporation issued call options on 20,000 shares of BWC Inc.on October 21,2012.These options give the holder the right to buy BWC shares at $35 per share until May 17,2013.For issuing these options,Sorrentino received $20,000.On December 31,2012 (Sorrentino's fiscal year-end),the options traded on the Montreal Exchange for $2.00 per option.On May 17,2013,BWC's share price increased to $38 and the option holders exercised their options.Sorrentino had no holdings of BWC shares.
Requirement:
For Sorrentino Corporation,record the journal entries related to these call options.

Question

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The Answer of Sorrentino Corporation issued call options on 20,000 shares of BWC Inc.on October 21,2012.These options give the holder the right to buy BWC shares at $35 per share until May 17,2013.For issuing these options,Sorrentino received $20,000.On December 31,2012 (Sorrentino's fiscal year-end),the options traded on the Montreal Exchange for $2.00 per option.On May 17,2013,BWC's share price increased to $38 and the option holders exercised their options.Sorrentino had no holdings of BWC shares.
Requirement:
For Sorrentino Corporation,record the journal entries related to these call options.

Sorrentino Corporation Issued Call Options on 20,000 Shares of BWC