Martinez Audio Visual Incorporated offers an incentive stock option plan to its regional managers. On January $1,2024,$ options were

granted for $76$ million $$1$ par common shares.

The exercise price is the market price on the grant date$-$ $$9$ per share.

Options cannot be exercised prior to January $1,2026,$ and expire December $31,2030.$

The fair value of the $76$ million options, estimated by an appropriate option pricing model, is $$1$ per option.

Required:

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

to $5.$ Prepare the appropriate journal entries to record compensation expense on December $31,2024$ and $2025.$ Prepare the

appropriate journal entry to record the exercise of $75\%$ of the options on March $12,2026,$ when the market price is $$10$ per share and

the entry on December $31,2030,$ when the remaining options that have vested expire without being exercised.

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

Prepare the appropriate journal entries to record compensation expense on December $31,2024$ and $2025.$ Prepare the appropriate

journal entry to record the exercise of $75\%$ of the options on March $12,2026,$ when the market price is $$10$ per share and the entry on

December $31,2030,$ when the remaining options that have vested expire without being exercised.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Enter your answers in

millions $($i$.$e$.,10,000,000$ should be entered as $10).$

Show less $4$

Journal entry worksheet

$4$

Record compensation expense on December $31,2024.$