On October $1,2021,$ Eagle Company forecasts the purchase of inventory from a British supplier on February $1,2022,$ at a price of $100,000$ British pounds. On October $1,2021,$ Eagle pays $$1,800$ for a three$-$month call option on $100,000$ pounds with a strike price of $$2\mathrm{.}00$ per pound. The option is considered to be a cash flow hedge of a forecasted foreign currency transaction. On December $31,2021,$ the option has a fair value of $$1,600.$ The following spot exchange rates apply:

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DateSpot RateOctober $1,2021$$$2\mathrm{.}00$December $31,2021$$$1\mathrm{.}97$February $1,2022$$$2\mathrm{.}01$

What journal entry should Eagle prepare for the option on December $31,2021?$

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EventGeneral JournalDebitCreditA$)$Foreign Currency Option$200$Cash$200$B$)$Foreign Currency Option$200$Other Comprehensive Income$200$C$)$Foreign Currency Option$400$Other Comprehensive Income$400$D$)$Other Comprehensive Income$200$Foreign Currency Option$200$E$)$Other Comprehensive Income$400$Foreign Currency Option$400$

Multiple Choice

Option D$.$

Option C$.$

Option A$.$

Option B$.$

Option E$.$