22 23 Question 2: On January 1st, 2020 Mandrake Company grants 5,000,000 shares of its $2 par common stock as stock options that employees can purchase in 3 years at the exercise price of $15 per share. 24 The fair value of this option is considered to be $5 a share. The company believes only 95% of employees will exercise these options. 25 26 Make the following journal entries if necessary: 27 28 January 1st, 2020 grant date entry: 29 30 31 32 December 31st, 2020 first expense date entry: 33 34 35 36 December 31st, 2022 assuming the full expected 95% of employees do exercise their options. The market value of the stock on this date is $50 a share. 37 38 39 40