On January 1, Year 1, LL Company issued 100 stock options with an exercise price of $18 each to five employees (total 500 options). The options vest on December 31, Year 2, after the employees have completed two years of service. LL expects that all employees vest in the options.

Date	Share Price	Fair value of option
Jan. 1, Year 1	$21	$12
December 31, Year 1	$21	$13
December 31, year 2	$30	$15

A. Assume that this is the equity-settled share-based transaction. Please make all necessary journal entries from Jan. 1, Year 1 to December 31, Year2.

B. Assume that this is the choice-of-settlement share-based transaction, in which the employees can choose to settle the options either (1) in shares of stock or (2) in cash. The option fair value of cash-settlement is equal to the fair value of equity-settlement. Please make all necessary journal entries from Jan. 1, Year 1 to December 31, Year 2 if all employees choose the share settlement.