On $\frac{1}{1}\frac{?}{24},$ the stockholders adopted a stock option plan for top executives whereby each might receive rights to purchase up to $22,000$ shares of common stock at $$35$ per share. The par value is $$10$ per share.

On $\frac{2}{1}\frac{?}{24},$ options were granted to each of five executives to purchase $22,000$ shares. The options were non$-$transferable, and the executive had to remain an employee of the company to exercise the option. The options expire on $\frac{2}{1}\frac{?}{26}.$ It is assumed that the options were for services performed equally in $2024$ and $2025.$ The Black$-$Scholes option pricing model determines total compensation expense to be $$1,960,000.$

At $\frac{2}{1}\frac{?}{26},$ four executives exercised their options. The fifth executive chose not to exercise his options, which therefore were forfeited.

No$.$

$1.$

$2.$

Account Titles and Explanation

Debit

Credit $$

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