Baxter Furniture Corporation is authorized to issue 30,000 shares of common stock, \(\$ 1\) par, of which 16,000 are outstanding; issue price \(\$ 8\) per share. On January 1,2020 , the company initiated a stock incentive plan for many employees. The plan provides for each qualified executive to receive options for 200 shares of the common stock. Subject to continued employment, the option is exercisable at any time after four years and prior to expiration, which is five years from the date of grant. The options are nontransferable, and the specified exercise price for the options is to be set equal to the grant date market price of the stock. The option is compensation, and any compensation cost is to be prorated equally for the period from the date of grant to the first exercise (vesting) date, which is four years or the requisite service period. The company's policy is to record forfeitures as incurred.

On January 1, 2020, 10 employees were each granted options to acquire 200 shares (per employee) under the plan when the market price of the stock was \(\$ 30\). The Black-Scholes option-pricing model is used, with estimates provided by management, to compute the fair value of an option. The fair value at the grant date of the options is \(\$ 30,000\).

All vested options are exercised just prior to their expiration on December 28, 2024, when the market price of the stock was \(\$ 50\) per share.

Required

a. Record the entry to record compensation cost for 2020.

b. At December 31, 2022, 2 grantees are no longer employed by the company. Record the entries to record the forfeiture by 2 grantees and to record compensation costs on December 31, 2022.

c. Record the entries for the exercise of all remaining vested options on December 28, 2024.