On January 1, 2016, Boeing granted 60,000 stock options to key members of its executive team. Each option grants the executives the ability to purchase one share of Boeings common stock ($10 par value) at a price of $40 per share. The options were exercisable within a 2-year period beginning on January 1, 2018, as long as the executives remain an employee at Boeing until that date. It is assumed that the options were for services performed equally in 2016 and 2017. The Black-Scholes option pricing model determines total compensation expense to be $1,300,000. On January 1, 2018, the Boeing executives exercised 48,000 of their stock options. On that date, Boeings stock had a market price of $50 per share. The remaining 12,000 stock options lapsed on January 1, 2020 because of the decision not to exercise their options.

Required:

Prepare the necessary journal entries related to the stock option plan for the years 2016 through 2020.