On April $1,2022,$ the Bush Investment Traders Corporation $[$BIT$]$ purchased a call option for $$175$ on the Worldwide Hotels, Inc., $[$WWH$]$ common shares. This call option gives $[$BIT$]$ the right to buy $700$ shares of $[$WWH$]$ at an exercise$/$strike price of $$27$ per share any time during the next six months. The market price of $[$WWH$]$ shares was $$27$ per share on April $1,2022.$ On June $30,2022,$ the fair value of the option was $$10,000.$ On the following day when the market price for $[$WWH$]$ stock was $$38$ per share, $[$BIT$]$ exercised the option.

Required

$1.$ Determine the Gain or Loss on the Derivatives which BIT would record on June $30,2022.$

$2.$ BIT exercised the call option on July $1,2022$ and took delivery of the WWH shares on that date when the market price was $$38$ per share. What would be the journal entry to record this transaction?

$3.$ Now assume that BIT exercised the call option on July $1,2022$ and settled the contract without taking delivery of the WWH shares when the market price was $$38$ per share. What would be the journal entry to record this transaction?