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On October 1 5 , 2 0 2 3 , the board of directors of Martinez Materlals Corporation approved a stock option plan for key

On October 15,2023, the board of directors of Martinez Materlals Corporation approved a stock option plan for key executlves. On January 1,2024,28 million stock options were granted, exercisable for 28 million shares of Martinez's $1 par common stock.
The options are exercisable between January 1,2027, and December 31,2029, at 80% of the quoted market price on January 1,2024, which was $15.
The fair value of the 28 million options, estimated by an appropriate option pricing model, is $6 per option.
Martinez chooses the option to recognize forfeltures only when they occur.
Ten percent (28 million) of the options were forfelted when an executlve resigned in 2025.
All other options were exercised on July 12,2028, when the stock's price Jumped unexpectedly to $27 per share.
Required:
When is Martinez's stock option measurement date?
2 Determine the compensation expense for the stock option plan in 2024.(Ignore taxes.)
Prepare the journal entrles to reflect the effect of forfelture of the stock options on Martinez's financlal statements for 2025 and 2026.
Prepare the Journal entry to account for the exercise of the options in 2028.
Complete this question by entering your answers in the tabs below.
&.5. Prepare the necessary journal entries.
Note: If no entry is required for a transaction/event, select "No foumal enty required" in the first account field. Enter your answers in milions rounded to 1 decimal place (i.e,5,500,000 should te entered as 5.5)
Journal entry worksheet
23
Record compensation expense on December 31,2025.
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