On Jan 1, 2012, Revlon, Inc. granted 5M of its $1 par common shares and 5M stock options (to purchase 5M common shares at $22 per share) to division managers. The granted shares and options are subject to forfeiture if employment is terminated within 5 years. the market price of the firm's common stock is $22.50 per share on the grant date. An appropriate option pricing model determines that the value of each stock option is $2.

a) What journal entry should Revlon record on December 31, 2012?

b) On December 15, 2013, Revlon used the same option pricing model to determine that the value of each stock option increased to $3 per option. Assuming no further changes in value prior the year end, what journal entry should Revlon record on December 31, 2013?

c) Assuming no further changes in the value of the stock options, no forfeitures, and that 2M of the granted stock options are exercised on December 31, 2016, what journal entry or entries should Revlon record on December 31, 2016?

d) What journal entry should Revlon record if 10% of the options expire un-exercised?