Final answer:
The correct transcription is Option 1: C And then the gnome turned her back. Option 2 and Option 3 have spelling errors.
Step-by-step explanation:
The correct transcription is Option 1: C And then the gnome turned her back.
According to the given information, the letter c always spells the sound [s] when it has the letters e, i, or y right after it. In Option 1, the letter c is followed by the letter e, so it correctly spells the sound [s].
On the other hand, Options 2 and 3 both have spelling errors. Option 2 has an incorrect transcribed form with [turn/ed], which is not accurate. Option 3 tries to correct the error by providing the correction [turn[EW:turned]], but it is not necessary. Therefore, Option 1 is the correct transcription.