Prepare the necessary entries from January 1, 2020 to February 1, 2022 for the following events using the fair value method. If no entry is needed, write "No Entry Necessary."

1. On January 1, 2020 the stockholders adopted a stock option plan for top executives whereby each might receive rights to purchase up to 30,000 shares of common stock at $40 per share. The par value is $10 per share.

2. On February 1, 2020, options were granted to each of five executives to purchase 30,000 shares. The options were non-transferable and the executive had to remain an employee of the company to exercise the option. The options expire on February 1, 2022. It is assumed that the options were for services performed equally in 2020 and 2021. The Black-Scholes option pricing model determines total compensation expense to be $3,200,000.

3. At February 1, 2022, four executives exercised their options. The Fifth executive chose not to exercise his options, which therefore were forfeited.

Prepare the journal entries over the January 1, 2020 to February 1, 2022 period. If no entry is needed, write "No Entry Necessary."