Princess Beatrice Ltd. announced a compensatory stock options plan for 100 employees on Jan. 1,20x2. Each of the employees would be allowed to purchase, after Dec. 31, 20x5, 300 common shares at the price of $21.50 per share. The options were non-transferable, would vest on Dec. 31, 20x5, and would expire on Dec. 31, 20x7. On the grant date (Jan. 1, 20x2), the company estimated by the Black and Scholes model that the options were worth $960,000. On August 1, 20x6, 72 employees exercised their options, when the shares were trading at $29. The remaining employees expected the share price to continue to rise and thus continued to hold the options. But not only did the share price fail to rise further, it began to decline afterward and dropped even below the strike price of $21.50 and stayed below it for a long stretch of time. Thus, the remaining options expired unexercised on Dec. 31, 20x7. Required: (1) Prepare journal entries for the compensatory stock options plan on the grant date (Jan. 1, 20x2) (2) Prepare journal entries for the compensatory stock options plan at the end of 20x2, 20x3, 20x4 and 20x5 (3) Prepare journal entries for the exercise of some options on August 1, 20x6. (4) Prepare journal entries for the expiration of the remaining options on Dec. 31, 20x7. [ P A