Naples Corporation issued call options on 20,000 shares of VESPUS Inc.on October 21,2012.These options give the holder the right to buy VESPUS shares at $35 per share until May 17,2013.For issuing these options,Naples received $60,000.On December 31,2012 (Naples's fiscal year-end),the options traded on the Montreal Exchange for $3.50 per option.On May 17,2013,VESPUS's share price increased to $40 and the option holders exercised their options.Naples had no holdings of VESPUS shares.
Requirement:
For Naples Corporation,record the journal entries related to these call options.

Question

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The Answer of Naples Corporation issued call options on 20,000 shares of VESPUS Inc.on October 21,2012.These options give the holder the right to buy VESPUS shares at $35 per share until May 17,2013.For issuing these options,Naples received $60,000.On December 31,2012 (Naples's fiscal year-end),the options traded on the Montreal Exchange for $3.50 per option.On May 17,2013,VESPUS's share price increased to $40 and the option holders exercised their options.Naples had no holdings of VESPUS shares.
Requirement:
For Naples Corporation,record the journal entries related to these call options.

Naples Corporation Issued Call Options on 20,000 Shares of VESPUS