On January 2, 20X1, Dwyer Corporation (a fictional company) granted 4,000 nonqualified stock options each to 10 of its key executives (40,000 options in total). Under the terms of the option plan, upon exercise, each executive will pay the exercise price of $10 per share of common stock ($1 par value). The options were exercisable after January 1, 20X4, and the executives were required to be employees of Dwyer at the date of exercise. The BlackScholes value of the option on the grant date is $12.50. Eight employees exercised options for 32,000 shares of stock on January 2, 20X5. Dwyer has a tax rate of 21% in all years. Dwyers deduction for compensation expense will not be affected by the $1 million limit. Relevant dates and stock prices are as follows:

January 2, 20X1	$	10
December 31, 20X1		19
December 31, 20X2		28
December 31, 20X3		45
December 31, 20X4		26
January 2, 20X5		26
December 31, 20X5		25

Prepare the journal entries required to record the stock option exercise on January 2, 20X5.