Assume the same information in Brief Exercise 21-25, except that the employees did not exercise the stock options due to the stock price remaining below \(\$ 15\) after the vesting period. Record the entry on January 1, 2026, for the expiration of the stock options.

Exercise 21-25

On January 1, 2020, Holiday Inc. offered a stock option incentive plan to a top executive. The plan provided the executive 300 stock options for Holiday Inc. \(\$ 1\) par value, common stock at an option price of \(\$ 15\) per share through the expiration date of January 1, 2026. The fair value of the options based upon an option-pricing model on January 1,2020 , is \(\$ 9,000\). The market price at year-end of Holiday Inc. stock is \(\$ 15\) per share on January 1,2020 , and \(\$ 18\) on December 31, 2020. The requisite service period is 3 years. The options were exercised on March 1, 2023, when the market price of the stock was \(\$ 20\) per share.

a. Prepare the journal entry (if any) required on January \(1,2020\).

b. . Prepare the adjusting journal entry required on December 31,2020 , the company's year-end.

c. Prepare the journal entry required on March 1, 2023.