On January 1, 2020, Giles Co. awards a total of 100,000 stock options to acquire 100,000 shares of commonstock ($1 par value) to 1,000 employees at an exercise price of $5 per share.The market price ofGiles Co. common stock on the grant date is $5 per share.The topions are exercisable after January 1, 2023, andexpire when an employee leaves the company or on December 31, 2029, whichever is first.The required serviceperiod is three years.Management estimates through a fair-value option-pricing model that total compensationexpense is $540,000 related to the stock options.

a.Record an entry (if applicable) on the date of grant.

b.Recognize compensation expense in 2020 related to the stock options

c.Employees exercised 90m000 options (90% of the options) that vested on Jan. 1, 2023.On that date, the market priceof Giles Co. stock was $7 per share.The amount collected from the employees totaled $450,000 or $5 x 90,000options.Record the journal entry on Janauary 1, 2023.