List of Accounts:

• Accounts Payable
• Accounts Receivable
• Accumulated Other Comprehensive Income
• Bonds Payable
• Cash
• Common Shares
• Compensation Expense
• Contributed Surplus - Conversion Rights
• Contributed Surplus - Conversion Rights Expired
• Contributed Surplus - Expired Stock Options
• Contributed Surplus - Stock Options
• Contributed Surplus - Stock Warrants
• Cost of Goods Sold
• Deficit
• Derivatives-Deposits
• Derivatives - Financial Assets/Liabilities
• Equipment
• Contributed Surplus - Stock Options
• Fair Value - NI Investments
• Fair Value - OCI Investments
• Finished Goods Inventory
• Gain or Loss on Derivatives
• Interest Expense
• Interest Income
• Interest Payable
• Interest Receivable
• Inventory
• Liability under Share - Appreciation Rights Plans
• Loss on Redemption of Bonds
• Loss on Retirement of Bonds
• No Entry
• Notes Payable
• Notes Receivable
• Preferred Shares
• Raw Materials
• Retained Earnings
• Raw Materials Inventory
• Sales Revenue
• Supplies
• Unrealized Gain or Loss
• Unrealized Gain or Loss - OCI
• Unrealized Holding Gain - Futures Contract

On November 1, 2019, Pharoah Corp. adopted a stock option plan that granted options to key executives to purchase 44,400 common shares. The options were granted on January 2, 2020, and were exercisable two years after the date of grant if the grantee was still a company employee; the options expire six years from the date of grant. The option price was set at $39, and total compensation expense was estimated to be $509,000. Note that the calculation did not take forfeitures into account. On April 1, 2021, 3,500 options were terminated when some employees resigned from the company. The fair value of the shares at that date was $26. All of the remaining options were exercised during the year 2022:31,100 on January 3 when the fair value was $49, and 9,800 on May 1 when the fair value was $55 a share. Assume that the entity follows ASPE and has chosen not to reflect forfeitures in its upfront estimate of compensation expense. (a) Prepare journal entries relating to the stock option plan for the years 2020, 2021, and 2022. Assume that the employees perform services equally in 2020 and 2021, and that the year end is December 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Round answers to 0 decimal places, e.g. 5,275. Do not round intermediate calculations.) Date Account Titles and Explanation Debit 1/2/20 12/31/20 (To record compensation expense for 2020) 4/1/21 (To record termination of stock options held by resigned employees.) 12/31/21 (To record compensation expense for 2021) 1/3/22 (To record issuance of 31,100 shares upon exercise of options at option price of $39) 5/1/22 (To record issuance of 9,800 shares upon exercise of remaining options at option price of $39)