Apple Corporation is authorized to issue 300,000 shares of common stock, $1 par, of which 140,000 shares had been issued. The corporation initiated a stock bonus plan during 2020 for designated managers. Under the plan, options vest with the grantee if still employed by the company two years from the date of grant. The rights are nontransferable and expire immediately after December 31, 2024. The exercise price is $20 per share. Assume that manager Bob receives stock options on January 1, 2020, to purchase 1,000 shares of Apple common stock. The market price of Apple common stock on the date of grant was $24 per share. Using an option-pricing model the fair value of the options granted to Roe is computed to be $12 per option.

Required: Journal entry a. Compute the total amount of compensation cost for the grant made to Bob.

b. What entry should be made on the date of the grant?

c. What entry should be made at December 31, 2020?

d. What entry should be made to record the exercise of the options held by Bob on December 31, 2024, when the stock of Apple Corporation was trading at $35 per share?

e. Assume instead that the common stock is trading at $18 per share on December 31, 2024. What journal entry (if any) should be recorded?