On August 15, 2021, Madison Company Issued 80,000 Options on the Shares

Essay

On August 15, 2021, Madison Company issued 80,000 options on the shares of MVC (Middefield Valley Corporation). Each option gives the option holder the right to buy one share of MVC at $70 per share until March 16, 2022. Madison received $800,000 for issuing these options. At the company's year-end of December 31, 2021, the options contracts traded on the Montreal Exchange at $9.50 per contract. On March 16, 2022, MVC shares closed at $63 per share, so none of the options was exercised.
Required:
Record the journal entries related to these call options.