Call Options Hedging Foreign Currency Debt Taking advantage of lower interest rates in the United Kingdom, Carlton

Question:

Call Options Hedging Foreign Currency Debt Taking advantage of lower interest rates in the United Kingdom, Carlton Inc., a U.S. firm, borrowed £2,000,000 on July 1, 2012, to be repaid in one year. When the transaction occurred, the was $1.50/£. To hedge against possible appreciation of the British pound, Carlton paid a premium of $0.014/£ for July 2013 call options on £2,000,000, with a of $1.49/£. Because the calls are hedging a foreign-currency-denominated obligation, hedge accounting does not apply and there is no need to designate all or part of the option premium as the hedge instrument. On December 31, 2012, when Carlton's books are closed, the is $1.55/£, and the calls are selling for $0.069/£. On June 30, 2013, Carlton sells the calls for $0.I2/£. The at that time is$1.61/£.
Required
Prepare Carlton's journal entries made on July 1, 2012, December 31, 2012, and June 30, 2013, to recognize the calls' value changes and the adjustments on the debt. Ignore interest on and repayment of the debt. Strike Price
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity. Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...