Martinez Audlo VIsual Incorporated offers an incentive stock option plan to its reglonal managers. On January $1,2024,$ optlons 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 optlon plan.

$2$ to $5.$ Prepare the approprlate Journal entrles to record compensation expense on December $31,2024$ and $2025.$ Prepare the approprlate 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.

Req $1$ Reg $2$ to $5$

Prepare the appropriate journal entries to record compensation expense on December $31,2024$ and $2025.$ Prepare the appropriate joumal entry to recond 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 pouml entry required ${?}^7$ in the first account field. Enter your answers in millions $($i$.$e$,10,000,000$ should be entered as $10),$

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Journal entry worksheet

Record compensation expense on December $31,2024.$

Date

General Journal

Debit

Credit