McEnroe Company has 20 executives to whom it grants compensatory share options on January 1, 2007. At that time it grants each executive the right to purchase 100 shares of its $5 par common stock at $40 per share after a three-year service period. The value of each option is estimated to be $10.25 on the grant date. Based on its average employee turnover rate each year, McEnroe expects that two executives will not vest in the plan. At the end of 2009 McEnroe confirms that the actual turnover was the same as expected. On January 5, 2010, three executives exercise their options.

Required

Prepare the journal entries of McEnroe Company for 2007 through 2010 in regard to its compensatory share option plan.