*E17-26B (Call Option) On July 10, 2014. Outback Co. invested idle cash by purchasing a call option on Toby Inc. common shares for $700. The notional value of the call option is 700 shares, and the option price is $31. (Market price of an Outback share is

*E17-26B (Call Option) On July 10, 2014. Outback Co. invested idle cash by purchasing a call option on
Toby Inc. common shares for $700. The notional value of the call option is 700 shares, and the option price
is $31. (Market price of an Outback share is $31.) The option expires on February 12, 2015. The following
data are available with respect to the call option.
                                                                     Market Price of Toby               Time Value of Call
        Date                                                             Shares                                       Option            
September 30, 2014                                    $32 per share                                  $410
December 31, 2014                                     $35 per share                                      50
January 31, 2015                                          $34 per share                                      20
Instructions
Prepare the journal entries for Outback for the following dates.
(a) Investment in call option on Toby shares on July 10, 2014.
(b) September 30, 2014—Outback prepares financial statements.
(c) December 31, 2014—Outback prepares financial statements.
(d) January 31, 2015—Outback settles the call option on the Toby shares.