On January 1, 2011, Scooby Corporation granted 10,000 options to key executives. Each option allows the executive to purchase one share of Scooby’s $5 par value common stock at a price of $20 per share. The options were exercisable within a 2-year period beginning January 1, 2013, if the grantee is still employed by the company at the time of the exercise. On the grant date, Scooby’s stock was trading at $25 per share, and a fair value option pricing model determines total compensation to be $450,000.

   On May 1, 2013, 9,000 options were exercised when the market price of Scooby’s stock was $30 per share. The remaining options lapsed in 2015 because executives decided not to exercise their options.

Instructions
Prepare the necessary journal entries related to the stock-option plan for the years 2011 through 2015.