11. Yuki Ferguson Cosmetics compensates its key employees by offering stock options as part of total compensation. On January 1 of the current year, Yuki Ferguson granted 15,000 options to acquire 15,000 shares of its $6.00 par value common stock at an exercise price of $17 per share. The market price on the date of the grant is also $17 per share so there is no intrinsic value. At the grant date, the fair value of the options is $270,000 or $27 per option. The initial vesting probability is assumed to be 100%. The option plan qualifies as a liability-classified award. Each executive is required to complete a two-year service period in order to exercise the options. Read the requirements Requirement a. Prepare the journal entry required on the date of the grant. (Record debits first, then credits. Exclude explanations from any journal entries. If no entry is required select "No Entry Required" on the first line of the journal entry table and leave all remaining cells in the table blank.) January, 1 Account No entry required Requirement b. Assuming no changes in vesting probability, prepare the journal entries required to record compensation expense over the vesting period. (Record debits first, then credits. Exclude explanations from any journal entries.) First, record the journal entry for year 1. December 31, Year 1 Account (1) Compensation Expense (2) Liability for Stock-based Compensation (3) Now, record the journal entry for year 2. December 31, Year 2 Account (5) Compensation Expense (6) Liability for Stock-based compensation (8) Requirement c. Prepare all journal entries required in year two, assuming that the vesting probability is reduced to 70%. December 31, Year 2 Account (9) Compensation Expense (10) Liability for stock-based comensal (11) (12) Requirement d. Using the information computed from part c, prepare the journal entry required to record the expiration of all options.(Record debits first, then credits. Exclude explanations from any journal entries.) Expiration Date Account (13) Liability for Stock-based compensation (14) Additional Paid in Capital Expired Options (15) (16) 1: Requirements a. Prepare the journal entry required on the date of the grant. b. Assuming no changes in vesting probability, prepare the journal entries required to record compensation expense over the vesting period. c. Prepare all journal entries required in year two, assuming that the vesting probability is reduced to 70%. d. Using the information computed from part c, prepare the journal entry required to record the expiration of all options