On January 1, 20X1, Darth Corp. (a fictional company) granted nonqualified stock options to certain key employees as additional compensation. The options were for 100,000 shares of Darths $1 par value common stock at an exercise price of $24 per share. The market price of this stock on January 1, 20X1, was $20 per share. The options were exercisable beginning January 2, 20X3, and expire on December 31, 20X9. Based on the Black-Scholes model, the options were valued at $16 per option at the date of grant. On July 1, 20X3, when Darths stock was trading at $55 per share, all the options were exercised. Darth has a marginal tax rate of 21%. Darth's deduction for compensation expense will not be affected by the $1 million limit. Required: 1. Prepare all the necessary pre-tax journal entries related to the stock options from January 1, 20X1, to July 1, 20X3. On January 1, 20X1, Darth Corp. (a fictional company) granted nonqualified stock options to certain key employees as additional compensation. The options were for 100,000 shares of Darths $1 par value common stock at an exercise price of $24 per share. The market price of this stock on January 1, 20X1, was $20 per share. The options were exercisable beginning January 2, 20X3, and expire on December 31, 20X9. Based on the Black-Scholes model, the options were valued at $16 per option at the date of grant. On July 1, 20X3, when Darths stock was trading at $55 per share, all the options were exercised. Darth has a marginal tax rate of 21%. Darth's deduction for compensation expense will not be affected by the $1 million limit. Required: 1. Prepare all the necessary pre-tax journal entries related to the stock options from January 1, 20X1, to July 1, 20X3