4 8 WorldStreet, Inc., offers a stock option plan to its regional managers. 5 On January 1, 2021,40 million options were granted for 40 million $1 par common shares. The exercise price is the market price on the grant date, 7 $8 per share. Options cannot be exercised prior to January 1, 2023, and expire December 31, 2027. The fair value of the options, estimated by an 9 appropriate option pricing model, is $2 per option. 10 Because the plan does not qualify as an incentive plan, WorldStreet will 11 receive a tax deduction upon exercise of the options equal to the excess of the market price at exercise over the exercise price. 13 The income tax rate is 25%. 14 1. Determine the total compensation cost pertaining to the 15 Numbers only 12 2. Prepare the appropriate journal entries to record compensati 16 17 18 19 20 21 FE Sheet1