Berg Company adopted a share-option plan on November 30, 2021, that provided that 70,000 shares of $5 par value ordinary shares be designated as available for the granting of options to officers of the company at a price of $9 a share. The market price was $12 a share on November 30, 2021.

On January 2, 2022, options to purchase 28,000 shares were granted to president Tom Winter—15,000 for services to be rendered in 2022 and 13,000 for services to be rendered in 2023. Also on that date, options to purchase 14,000 shares were granted to vice president Michelle Bennett—7,000 for services to be rendered in 2022 and 7,000 for services to be rendered in 2023. The market price of the shares was $14 a share on January 2, 2022. The options were exercisable for a period of 1 year following the year in which the services were rendered. The fair value of the options on the grant date was $4 per option.

In 2023, neither the president nor the vice president exercised their options because the market price of the shares was below the exercise price. The market price was $8 a share on December 31, 2023, when the options for 2022 services lapsed. On December 31, 2024, both Winter and Bennett exercised their options for 13,000 and 7,000 shares, respectively, when the market price was $16 a share.

Instructions

Prepare the necessary journal entries in 2021 when the share-option plan was adopted, in 2022 when options were granted, in 2023 when options lapsed, and in 2024 when options were exercised.