Icon Company initiated a share option plan for its chief executive officer on 1 January 20x1. The terms of the share option plan are as follows:

(a) The vesting date is 31 December 20x3 and the chief executive officer must still remain in the company’s employ at that date.

(b) The number of options that will vest is dependent on the average rate of growth of earnings per share over the next three years as follows:

(i) If the average rate of growth of earnings per share per year is less than 10%, the number of share options is nil.

(ii) If the average rate of growth of earnings per share per year is between 10% and 15%, 100,000 share options will be given to the chief executive officer.

(iii) If the average rate of growth of earnings per share per year exceeds 15%, 150,000 share options will be given to the chief executive officer.

The fair value of one option was estimated at $5 at the grant date. Icon Company expected the average annual growth rate of the company to be not less than 10% per year.

Earnings per share for the year ended 31 December 20x1 increased by 13% and the company expected this rate of growth to be maintained for the next two years. For the year ended 31 December 20x2, earnings per share increased by 20% and the company expected the average rate of growth of earnings per share for the three years to 31 December 20x3 to be 16.5% (average of 20x1 and 20x2 growth rates). The actual earnings per share for the year ended 31 December 20x3 was 10%. Ignore taxation.

Required
1. Calculate the remuneration expense relating to the share options for the period 20x1 to 20x3.
2. Prepare the journal entries relating to the share options for each of the years.