On October 1, 2019, Harvey Company adopted a stock-option plan that granted options to key executives to purchase 30,000 shares of the companys $10 par value common stock. The options were granted on January 2, 2020 and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 5 years from date of grant. The option price (exercise price) was set at $50, and the binomial-lattice option-pricing model determines the total compensation expense to be $420,000.

All of the options were exercised during the year 2022: 14,500 shares of common stock were purchased on January 5 when the market price was $74, and the other 15,500 shares of common stock were purchased on June 1 when the market price was $78 a share.

Assume that the employee performs services equally in 2020 and 2021.

1. Determine the amount of compensation expense to record in 2020 and 2021.

2. Determine the amount of cash Harvey received for the exercised stock options on January 5, 2022 and June 1, 2022.

3. Determine the amount of the increase in the common stock account on January 5, 2022 and June 1, 2022.