Sorrentino Corporation Issued Call Options on 20,000 Shares of BWC

Essay

Sorrentino Corporation issued call options on 20,000 shares of BWC Inc. on October 21, 2019. These options give the holder the right to buy BWC shares at $35 per share until May 17, 2020. For issuing these options, Sorrentino received $20,000. On December 31, 2019 (Sorrentino's fiscal year-end), the options traded on the Montreal Exchange for $2.00 per option. On May 17, 2020, BWC's share price increased to $38 and the option holders exercised their options. Sorrentino had no holdings of BWC shares.
Required:
For Sorrentino Corporation, record the journal entries related to these call options.