When a Bank sells a call option to an option buyer, the __________ of the option contract is shown as an ____________________ item in the books of the bank.

When a bank sells a call option to an option buyer, the "premium received" from the sale of the option contract is shown as an "income" item in the books of the bank.

Here's the step by step explanation:

1. A call option is a financial contract that gives the option buyer the right, but not the obligation, to buy a stock, bond, commodity or other instrument at a specified price within a specific time period.

2. The bank that sells the call option is essentially selling this right to the option buyer.

3. In return for selling this right, the bank receives a payment from the option buyer. This payment is known as the "premium".

4. This premium is recorded in the bank's books as an income item because it is revenue that the bank has earned from selling the call option.