As part of its stock-based compensation package, International Electronics granted 60 million stock appreciation rights (SARs) to top officers on January 1, 2021. At exercise, holders of the SARs are entitled to receive cash or stock equal in value to the excess of the market price at exercise over the share price at the date of grant. The SARs cannot be exercised until the end of 2024 (vesting date) and expire at the end of 2026. The $1 par common shares have a market price of $50 per share on the grant date. The fair value of the SARs, estimated by an appropriate option pricing model, is $3.50 per SAR at January 1, 2021. The fair value re-estimated at December 31, 2021, 2022, 2023, 2024, and 2025, is $4.50, $3.50, $4, $2.00, and $2.25, respectively. All recipients are expected to remain employed through the vesting date. Required:

1. to 3. Prepare the appropriate journal entries pertaining to the SARs on January 1, 2021 and December 31, 2021December 31, 2024. The SARs remain unexercised on December 31, 2025, prepare the appropriate entry. 4. The SARs are exercised on June 6, 2026, when the share price is $54, and executives choose to receive the market price appreciation in cash. Prepare the appropriate journal entry(s) on that date.

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Req 1 to 3 Reg 4 Prepare the appropriate journal entries pertaining to the SARS on January 1, 2021 and December 31, 2021-December 31, 2024. The SARs remain unexercised on December 31, 2025, prepare the appropriate entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 5,550,000 should be entered as 5.50).) Show less View transaction list Journal entry worksheet Record the award of 60 million SARS on January 1, 2021 when the market price of the stock is $50 per share and the fair value of the SARS is $3.50 per SAR. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2021 Req 1 to 3 Reg 4 The SARs are exercised on June 6, 2026, when the share price is $54, and executives choose to receive the market price appreciation in cash. Prepare the appropriate journal entry(s) on that date. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Show less View transaction list Journal entry worksheet Record any necessary adjustment to compensation expense. Note: Enter debits before credits. Date General Journal Debit Credit June 06, 2026