On 1 January 20x1, Sunranch Ltd (incorporated in Singapore and which adopts 31 December financial year-ends) granted 50,000 share options to each of its 20 managers at the exercise price of $18. The options would vest conditional upon the employees working for the company until 31 December 20x3. The options would be forfeited if the employee leaves the company during the service period of three years. The options expire on 31 December 20x5. The estimated fair value (FV) of each option and the share price of Sunranch Ltd is given below: FV of share option Price of Sunranch shares 1 January 20x1 $7.50 - 31 December 20x1 $5.70 $16.00 31 December 20x2 $6.00 $16.50 31 December 20x3 $6.30 $17.50 31 December 20x4 - $18.50 On 1 January 20x1, management estimated the total forfeiture rate of the stock options over the three years to be 10%. At the end of 31 December 20x1, they re-estimated the forfeiture rate to be 20%. At the end of 31 December 20x2, their estimation remained at 20%. The actual resignations that occurred during the year ending 31 December 20x1, 31 December 20x2, and 31 December 20x3 are 1, 2 and 0 respectively. On 31 December 20x4, 5 managers exercised all the share options granted to them.

Required: Illustrate the accounting of this option plan by Sunranch Ltd under FRS 102 Share-based Payment by preparing the journal entries (including journal narratives and proper dates) for each of the years from 20x1 to 20x4. Ignore tax effect, if any. Show all workings clearly for figures used in the journal entries to get full credit. In addition, if any event or transaction does not require any journal entry, state that clearly in your answers with a brief explanation why. (18 marks)