Globe Corporation, a new environmental control company, initiated a performance based

stock option plan for its management on January 1, 2010. The plan provided for the granting of a variable number of stock options to management personnel who worked for the entire 4-year period ending December 31, 2013, depending on the net income earned by the company in 2013. No options were granted for the first $50,000 of net income. Thereafter, the following options were available based on the level of net income in 2013.

$50,000–$99,999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000 stock options

$100,000–$124,999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000 stock options

$125,000–$149,999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000 stock options

$150,000 or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 stock options

The exercise price for the $5 par common stock was $20 per share. The fair value of the options on the grant date was $9.

Assume the market price for the Globe stock and Globe's forecasted 2013 net income were as follows at each of the following dates:

Instructions:
Prepare journal entries related to the stock options of Globe for the period 2010–2013 assuming that all available options are exercised on December 31,2013.

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Stock Price Forecasted 2013 Income January I, 2010 December 3, 2010 Decembe 3, 2011 December 31. 2012 December 31. 2013 $24 31 26 32 $120,000 .. 40,000 170,000 135,000 45,000 (actuai)