Exercise 19-29 (Algo) Stock appreciation rights; settlement in shares (Appendix 19B) As part of its stock-based compensation package, International Electronics (IE) granted 32 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-b 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. Complete this question by entering your answers in the tabs below. Req 1A Req 18 to 4 Will the SARS be reported as debt or as equity? Will the SARS be reported as debt or as equity? Reg 1A Req 18 to 4 > Req 1A Req 1B to 4 Prepare the appropriate journal entries pertaining to the SARS on January 1, 2021 and December 31, 2021-Decen Assuming the SARS remain unexercised on December 31, 2025, prepare the appropriate entry. Prepare the entry exercised on June 6, 2026, when the share price is $50. (If no entry is required for a transaction/event, select "No required" in the first account field. Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 sho 5.50).) View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 Record the award of 32 million SARS on January 1, 2021 when the market price of the stock is $49 per share and the fair value of the SARS is $3 per SAR. Note: Enter debits before credits. Date January 01, 2021 General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet 1 2 Record any necessary journal entry on December 31, 2021 when the fair value of the SARS is estimated at $4 per SAR. Note: Enter debits before credits Date December 31, 2021 General Journali Debit Credit Clear entry View general journal Record entry 02.07.23 View transaction list Journal entry worksheet 4 5 6 7 Record any necessary journal entry on December 31, 2022 when the fair value of the SARS is estimated at $3 per SAR. Note: Enter debits before credits. Date December 31, 2022 General Journal Debit Credit Record entry Clear entry View general journal Show lessa View transaction listi Journal entry worksheet < 1 2 3 7 Record any necessary journal entry on December 31, 2023 when the fair value of the SARS is estimated at $4 per SAR. Note: Enter debits before credits. Date December 31, 2023 General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 Record any necessary entry on December 31, 2025 when all of the SARS remain unexercised. Note: Enter debits before credits. Date December 31, 2025 General Journal Debit Credit View general journal Clear entry Record entry 02:06:46 View transaction list Journal entry worksheet < 1 2 3 5 6 7 Record any necessary entry on June 6, 2026 when the SARS are exercised and the share price is $50. Note: Enter debits before credits, Date June 06, 2026 General Journal Debit Credit Record entry Clear entry View general journal Show less a