On January $1$ of Year $1,$ Holiday Inc. offered a stock option incentive plan to a top executive. The plan

provided the executive $360$ stock options for Holiday Inc. $$1$ par value, common stock at an option price

of $$15$ per share through the expiration date of January $1$ of Year $7.$ The fair value of the options based

upon an option$-$pricing model on January $1$ of Year $1,$ is $$10,800.$ The market price at year$-$end of Holiday

Inc. stock is $$15$ per share on January $1$ of Year $1,$ and $$18$ on December $31$ of Year $1.$ The requisite service

period is $3$ years. The options were exercised on March $1$ of Year $4,$ when the market price of the stock

was $$20$ per share.

a$.$ Prepare the journal entry $($if any$)$ on January $1$ of Year $1.$

b$.$ Prepare the adjusting journal entry on December $31$ of Year $1,$ the company's year$-$end.

c$.$ Prepare the journal entry on March $1$ of Year $4.$

Note: If a line in a journal entry isn't required for the transaction, select $"$N$/$A$$debit$"$ and $"$N$/$A$$credit$"$ as

the account names and leave the Dr$.$ and Cr$.$ answers blank $($zero$).$