So the cash premium received from the sale of a call will be reflected as an asset and a current liability will be entered to will offset that cash. Is that correct? What is the liability called - something like "unearned call sales price"?
As a related question, how are unsettled stock trades existing at year-end reflected in the balance sheet? Sales that have not yet settled will be considered income for the year and reflected in the 1099 as occurring in that year, but the cash will not have been received until the subsequent year (and the stock at year-end will show as an asset but at the cost basis not the sales price that will be received). Also, if a year-end purchase has not yet settled, the purchase date is considered the trade date. Is anything reflected on the balance sheet for such a purchase?
Your input is much appreciated!
