Exercise $19-9($Static$)$ Stock options; exercise $[$LO$19-2]$

SSG Cycles manufactures and distributes motorcycle parts and supplies. Employees are offered a variety of share$-$based compensation plans. Under its nonqualified stock option plan, SSG granted options to key officers on January $1,2024.$

The options permit holders to acquire $12$ million of the company's $$1$ par common shares for $$11$ within the next six years, but not before January $1,2027($the vesting date$).$

The market price of the shares on the date of grant is $$13$ per share.

The fair value of the $12$ million options, estimated by an appropriate option pricing model, is $$3$ per option.

Required:

Determine the total compensation cost pertaining to the incentive stock option plan.

& $3.$ Prepare the appropriate journal entries to record compensation expense on December $31,2024,2025,$ and $2026.$ Record the exercise of the options if all of the options are exercised on May $11,2028,$ when the market price is $$14$ per share

Complete this question by entering your answers in the tabs below.

Req $1$

Req $2$ and $3$

Determine the total compensation cost pertaining to the incentive stock option plan.

Note: Enter your answer in millions $($i$.$e$.,10,000,000$ should be entered as $10).$

Total compensation cost

milion