On May 1,20x1,Usstar Purchased a Put Option to Sell £50,000

Multiple Choice

On May 1,20x1,Usstar purchased a put option to sell £50,000 on April 30,20x2 at a strike price equal to $2,which was the spot rate on May 1,20x1. Usstar paid a premium of $0.01 per pound. How should the option be recorded on May 1,20x1?

A) Debit FOREIGN CURRENCY OPTION for $100,500.
B) Credit FOREIGN CURRENCY OPTION for $100,500.
C) Debit FOREIGN CURRENCY OPTION for $500.
D) Debit HEDGE EXPENSE for $500.