As part of its stock-based compensation package, International Electronics (IE) granted 24 million stock appreciation rights (SARs) to top officers on January 1, 2021. At exercise, holders of the SARS are entitled to receive 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 $49 per share on the grant date. The fair value of the SARs, estimated by an appropriate option pricing model, is $3 per SAR at January 1, 2021. The fair value re-estimated at December 31, 2021, 2022 2023 2024 and 2025, is $4, $3, $4$2.50, and $3, respectively. All recipients are expected to remain employed through the vesting date Required: 1-a. Will the SARs be reported as debt or as equity? 1-5 to 4. Prepare the appropriate journal entries pertaining to the SARS on January 1, 2021 and December 31, 2021-December 31, 2024. Assuming the SARS remain unexercised on December 31, 2025, prepare the appropriate entry. Prepare the entry when the SARs are exercised on June 6, 2026, when the share price is $50. No Debit Credit Date General Journal January 01, 2021 No journal entry required 1 2 24.00 December 31, 202 Compensation expense Paid-in capital - SAR plan 24.00 3 12.00 December 31, 202 Compensation expense Paid-in capital - SAR plan 12.00 4 36.00 December 31, 202 Compensation expense Paid-in capital - SAR plan 36.00 5 12.00 December 31, 202 Compensation expense Paid-in capital - SAR plan 12.00 6 December 31, 202 No journal entry required 7 June 06, 2026 72.00 Paid-in capital - SAR plan Common stock Paid-in capital - excess of par 0.48 71.52