On August $1,2023,$ WMT Ltd$.$ purchased a call option from DDR Investments Corporation. The option gave WMT the right to buy $16,000$ shares in a third company, MGL Ltd$.,$ at a price of $\backslash (\backslash$$ $21\mathrm{.}50\backslash )$ per share. On the day WMT purchased the option, MGL shares were trading at $\backslash (\backslash$$ $21\mathrm{.}50\backslash )$ each. WMT paid $\backslash (\backslash$$ $600\backslash )$ for the options. On August $31,2023,$ the MGL shares were trading at $\backslash (\backslash$$ $28\mathrm{.}50\backslash )$ each, and the options for MGL shares were trading at $\backslash (\backslash$$ $40,400\backslash ).$ On September $15,$ WMT settled the options in cash when the MGL shares were trading at $\backslash (\backslash$$ $29\mathrm{.}50\backslash )$ and the options were trading at $\backslash (\backslash$$ $128,000\backslash ).$

$($b$)$

Prepare the journal entries to record the above transactions. $($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 O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.$)$

Date

August $1,2023$

August $31,2023$

Account Titles and Explanation

Derivatives $-$ Financial Assets$/$Liabilities

Cash

$\backslash (\backslash$square $\backslash )$

$($To record the change in value of the option.$)$

$($To record the settlement of the option.$)$

Debit

Cr