Heidi Software Corporation provides a variety of share$-$based compensation plans to its employees. Under its executive stock option plan, the company granted options on January $1,2024,$ that permit executives to acquire $12$ million of the company$$s $$1$ par common shares within the next five years, but not before December $31,2025($the vesting date$).$

The exercise price is the market price of the shares on the date of grant, $$84\mathrm{.}50$ per share.

The fair value of the $12$ million options, estimated by an appropriate option pricing model, is $$20$ per option.

No forfeitures are anticipated.

Ignore taxes.

Required:

Determine the total compensation cost pertaining to the options.

Prepare the appropriate journal entry to record the award of options on January $1,2024.$

Prepare the appropriate journal entry to record compensation expense on December $31,2024.$

Prepare the appropriate journal entry to record compensation expense on December $31,2025.$