On October 15, 2023, the board of directors of Martinez Materials Corporation approved a stock option plan for key executives. On January 1, 2024, 26 million stock options were granted, exercisable for 26 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 $20.
• The fair value of the 26 million options, estimated by an appropriate option pricing model, is $6 per option.
• Martinez chooses the option to recognize forfeitures only when they occur.
• Ten percent (2.6 million) of the options were forfeited when an executive resigned in 2025.
• All other options were exercised on July 12, 2028, when the stocks price jumped unexpectedly to $25 per share.

Required:

1. When is Martinezs stock option measurement date?

2. Determine the compensation expense for the stock option plan in 2024. (Ignore taxes.)

3. Prepare the journal entries to reflect the effect of forfeiture of the stock options on Martinezs financial statements for 2025 and 2026.

5. 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. 1. \& 2. When is Martinez's stock option measurement date? Determine the compensation expense for the stock option plan in 2024. (Ignore taxes.) Note: Enter your answer in millions (i.e., 10,000,000 should be entered as 10 ). Complete this question by entering your answers in the tabs below. 3. \& 5. Prepare the necessary journal entries. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5)