$03]$ On April $1,2023,$ Spekulater Ltd$.,$ paid $$500$ for the option to buy $2,000$ common sharesof TradeKo, Ltd$.,$ for $$64$ per share anytime between April $1$ and June $30.$ The contract stipulates that it may only be settled by exercising the option and buying the TradeKo shares. The market price on April $1$ was $$25.$ Spekulater prepares its financial statements on December $31,2023.$ On May $28,$ Spekulater exercised their right when the market price per share was $$90.$ The company follows IFRS. What is the entry made on May $28?$

Question $3$Answer

a$.$

DR FV$-$Investment $......$ $$180,000$; CR Derivatives$-$Financial Assets$/$Liabilities $......$ $$500$; CR Gain$/$Loss on Derivatives $......$ $$51,500$; CR Cash $......$ $$128,000$

b$.$

DR FV$-$Investment $......$ $$180,000$; CR Derivatives$-$Financial Assets$/$Liabilities $......$ $$500$; CR Gain$/$Loss on Derivatives $......$ $$79,500$; CR Cash $......$ $$100,000$

c$.$

DR FV$-$Investment $......$ $$100,000$; DR Gain$/$Loss on Derivatives $......$ $$28,500$; CR Derivatives$-$Financial Assets$/$Liabilities $......$ $$500$; CR Cash $......$ $$128,000$

d$.$

DR Cash $......$ $$180,000$; CR Derivatives$-$Financial Assets$/$Liabilities $......$ $$500$; CR Gain$/$Loss on Derivatives $......$ $$51,500$; CR Common Shares $......$ $$128,000$

e$.$

None of the above